CONSUMER AND PUBLIC PROTECTION WITHIN THE FINANCIAL SERVICES SECTOR

To create a financial system that grows in a sustainable and stable manner, and is capable of protecting the interests of consumers and society, Indonesia Financial Services Authority/Otoritas Jasa Keuangan (“OJK”) has issued OJK Regulation No. 6/POJK.07/2022 of 2022 on the Consumer and Public Protection within the Financial Services Sector (“POJK 6/2022”).

With the development of financial services providers, POJK 6/2022 emphasizes on the principles of consumer and public protection, namely adequate education, information disclosure and transparency, fair treatment and responsible business behavior, protection of assets, privacy, and consumer data, as well as effective and efficient complaint handling and dispute resolution.

The following are the Financial Services Business Actors (Pelaku Usaha Jasa Keuangan – “PUJK”) that are subject to POJK 6/2022:

1. Commercial banks;
2. Rural banks / rural financing companies;
3. Brokers;
4. Investment managers;
5. Pension funds;
6. Insurance companies;
7. Reinsurance companies;
8. Financing companies;
9. Infrastructure financing companies;
10. Venture capital companies;
11. State-owned pawnshops;
12. Private pawnshops;
13. Guarantee companies;
14. Micro-financing Institutions;
15. Indonesian export-financing Institutions;
16. Other financial services and/or parties that undertake any of the following types of business activities: fund accrual, fund distribution, and fund management within the financial services sector, as supervised by the OJK.

The following are the obligations of PUJK under POJK 6/2022:
(a) PUJK shall have and implement the written policies and procedures on consumers protection. The written policies and procedures shall at least consist of:
(i) equal access to all consumers;
(ii) special services related to the consumers with disability and to the elderly;
(iii) consumer asset protection;
(iv) consumer data and/or information protection;
(v) information on handling and resolving complaints submitted by consumers; and
(vi) mechanism for using consumer’s personal data and/or information;

(b) PUJK is required to carry out activities to improve financial literacy to consumers and/or the public. These activities shall be carried our as annual programs;

(c) Self-assessment
In compliance with the regulations of the consumers and public protection, PUJK shall conduct self-assessment. PUJK is required to submit a report on the results of the self-assessment to OJK once a year but no later than 30th September of the current year.

(d) PUJK is required to have a function or unit for the implementation of the provisions of consumers and public protection.

The function or unit as referred above may be concurrent with other functions or units. The concurrence of functions or units is carried out by avoiding conflicts of interest in employees. In establishing this function or unit, PUJK shall consider:
(i) the number of assets;
(ii) the number of offices;
(iii) the number and complexity of products and/or services;
(iv) the consumer classification number; and/or
(v) the number of human resources of PUJK.

The consumers and public protection function or unit shall have, at least, the following duties:
(i) provide socialization to all employees at PUJK regarding consumers and public protection;
(ii) coordinate the planning and implementation process of PUJK compliance with the provisions regarding consumers and public protection in the financial services sector;
(iii) coordinate with related units for monitoring and evaluation of the implementation of PUJK compliance to the provisions regarding consumers and public protection in the financial services sector;
(iv) report to the Board of Directors (“BOD”) regarding the implementation of consumer and public protection, as well as provide recommendations for improvement and development of consumers and public protection; and
(v) coordinate the preparation and submission of reports related to consumers and public protection in the financial services sector in accordance with the provisions of the regulation in the financial service sector.

(e) PUJK is required to have a reporting mechanism to the BOD for compliance with the provisions of POJK 6/2022. The BOD is responsible for the compliance with POJK 6/2022. The Board of Commissioners (“BOC”) is required to supervise the implementation of the BOD’s responsibilities towards compliance with the implementation of the provisions of POJK 6/2022.

Moreover, PUJK shall prevent its members of BOD, BOC, employee and/or any third-party that working for or represent the interest of PUJK from conducting the following:
(i) enrich or benefit themselves or others; and/or
(ii) abuse their power, opportunity, or facilities available for them because of their position or title, that cause loss for the consumers.

PUJK will be responsible for any losses that consumers suffer because of the wrongdoing, negligence, and/or actions that violate the provisions of the regulation in the financial service sector carried out by the member of the board of director and board of commissioner, employee, and/or third parties working for or represent the interest of PUJK.

However, if PUJK can prove that there is an involvement, wrongdoing, negligence and/or actions that violate the regulation in the financial service sector carried out by the consumer, PUJK will not be responsible for any losses that consumer suffers.
The form of responsibility for the consumer’s losses shall be agreed between the consumer and PUJK.

PUJK is also prohibited from:
(a) providing personal data and/or information regarding the Consumers to other parties;
(b) requiring consumers to agree to share personal data and/or information as a condition of use of products and/or services;
(c) using data and/or personal information of consumers who have terminated the product and/or services agreement;
(d) using data and/or personal information of prospective Consumers requesting the use of the product and/or service is rejected by PUJK; and/or
(e) using the personal data and/or information of prospective Consumers who withdraw the application use of products and/or services.

The prohibition shall be excluded in the event of (i) consumer providing their consent; and/or (ii) required or stipulated by the provisions of the law and regulation.

Withdrawal of consent and/or partial amendment of consent for the provision of personal data and/or information of consumer shall be made in writing or electronically by the consumer.

The PUJK is required to explain in writing and/or verbally the purpose and consequences of the approval of the Consumer related to the provision of the Consumer’s personal data and/or information.

If PUJK uses information technology to manage personal data and/or information of the consumers, PUJK is required to use a reliable information technology and ensure data security and/or consumer’s personal information by examining the feasibility and/or the security periodically.

If PUJK obtains personal data and/or information of a person and/or group of people from other parties and PUJK will use the personal data and/or information to carry out activities, PUJK must:
(a) have a written statement that the other party has obtained approval from the relevant person and/or group of people to provide their personal data and/or information to certain parties, including PUJK; and
(b) inform the consumer about the source of the personal data and/or information obtained PUJK.
The following shall be considered as a personal data and/or information:

Personal	Company
1. name;	1. Name;
2. citizenship number;	2. Address;
3. address;	3. Phone number;
4. birthdate and/or age;	4. BOD and BOC composition, including identity document in the form of an Identity Card Resident/passport/residence permit;
5. phone number;	5. Shareholders composition; and/or
6. biological mother’s name; and/or	6. other data submitted or granted access by the consumers to the PUJK.
7. other data submitted or granted access by the consumers to the PUJK

Failures to comply with the provisions of self-assessment PUJK shall be subject to administrative penalties as follows:
a. IDR 100,000 per day of delay with maximum amount of IDR 10,000,000 for PUJK in the form of commercial banks, brokers, investment managers, pension funds, insurance companies, reinsurance companies, company infrastructure financing, government pawnshops, Indonesia export-financing institutions, peer to peer lending companies, PT Madani National Capital (Persero), and crowdfunding service providers, or
b. IDR 50,000 per day of delay with maximum amount of IDR 5,000,000for PUJK in the form of a rural bank/rural financing, financing companies, venture capital companies and guarantee companies.

Private pawnshops, micro-finance institutions, other financial services institutions and/or parties conducting fund-raising, fund-distribution, and/or fund-management activities in the financial services sector violating their own provisions are subject to administrative sanctions in the form of written warnings.
Besides the above, PUJK shall also be subject to the following sanctions if PUJK fails to comply with the provisions in POJK 6/2020:
a. a written warning;
b. a fine;
c. prohibition as principal party in accordance with the OJK regulation on the reassessment for the principal party of the financial services institution;
d. restriction on the products and/or services and/or business activities;
e. freezing of products and/or services and/or business activities;
f. revocation of product and/or service licenses; and
g. revocation of business licenses.
In addition to the aforementioned, POJK 6/2022 also provides the regulation on the (i) design and product services, (ii) provision of the product and services information, (iii) product and services marketing, (iv) Provision of Services for the Use of Products and Services, (v) Complaint Handling and Dispute Resolution on Products and Services.

By : Sheni Adriana