The Financial Services Authority’s (OJK) office. (kontan.co.id/File)
The Financial Service Authority’s (OJK) investment watch force has estimated that fake investments had caused total losses of Rp 88.8 trillion (US$6.27 billion) in 2018.
The head of the task force, Tongam Lumban Tobing, said the rampant fake investments were triggered by a lack of understanding among the people about proper investing and, therefore, they could be easily attracted by offers of high returns from fake investment managers.
He added that the emergence of widespread peer to peer (P2P) lending, most of which were operated illegally, that offered their services through the internet had become fertile ground for fake investment managers to operate.
“The platforms use information technology to illegally offer investment products through websites, applications and P2P lending. Many people use the services of platforms unlicensed by the OJK,” Tongam said on Friday as quoted by kontan.co.id.
He added that the same fake investment managers had used religious leaders and celebrities to trap people into taking part in their illegal activities.
He said in 2018, the task force had managed to stop the operations of 108 investment entities and unlicensed 404 P2P lending platforms, while up to March this year, the task force had stopped the operation of 47 fake investment managers and unlicensed 399 P2P platforms.
He said that only 99 P2P lending platforms had OJK permits and he estimated that more than 800 entities were still operating illegally.
Tongam said the fate investment managers would continue to emerge as long as there were still many people who were interested in taking part in their programs. Therefore, he added, the task force would continue to carry out education and disseminate programs to help people choose the right investment products.