Financial Services Authority Regulation Number 1/POJK.07/2013 on Consumer Protection in the Financial Services Sector

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FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA
COPY
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER: 1/POJK.07/2013
CONCERNING
CONSUMER PROTECTION IN THE FINANCIAL SERVICES SECTOR BY THE GRACE OF GOD THE ALMIGHTY THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY, Considering: that in order to implement the provisions of Article 31 of Law Number 21 of 2011 concerning the Financial Services Authority, it is necessary to establish a Financial Services Authority Regulation concerning Consumer Protection in the Financial Services Sector; Recalling: Law Number 21 of 2011 concerning the Financial Services Authority (State Gazette of the Republic of Indonesia Year 2011 Number 111; Supplement to the State Gazette of the Republic of Indonesia Number 5253); DECIDING:
Establishing: A FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING CONSUMER PROTECTION IN THE FINANCIAL SERVICES SECTOR.

CHAPTER I
GENERAL PROVISIONS

Article 1
In this Financial Services Authority Regulation, the following terms are defined as:

1. Financial Service Business Actor is a Commercial Bank, Rural Bank, Securities Company, Investment Advisor, Custodian Bank, Pension Fund, Insurance Company, Reinsurance Company, Financing Company, Pawn Company, and Guarantee Company, both conducting business activities conventionally and/or based on Sharia principles.
2. Consumer is the party or parties who place their funds and/or utilize services available at Financial Service Institutions, such as customers in Banking, investors in the Capital Market, policyholders in Insurance, and participants in Pension Funds, based on legislation in the financial services sector.
3. Consumer Protection is protection for Consumers covering the behavior of Financial Service Business Actors.
4. Commercial Bank is a bank that conducts business activities conventionally and/or based on Sharia Principles, which in its activities provides services in payment transactions.
5. Rural Bank is a bank that conducts business activities conventionally or based on Sharia Principles, which in its activities does not provide services in payment transactions.
6. Securities Company is a Party that conducts business activities as a Securities Underwriter, Securities Broker, and/or Investment Manager.
7. Securities Underwriter is a Party that makes a contract with an Issuer to conduct a Public Offering for the benefit of the Issuer with or without the obligation to purchase unsold Securities.
8. Securities Broker is a Party that conducts business activities buying and selling Securities for its own benefit or for the benefit of other Parties.
9. Investment Manager is a Party whose business activities manage Securities Portfolios for customers or manage collective investment portfolios for a group of customers, except insurance companies, pension funds, and banks that conduct their own business activities based on applicable legislation.
10. Investment Advisor is a Party that gives advice to other Parties regarding the sale or purchase of Securities in exchange for service fees.
11. Custodian Bank is a Commercial Bank that provides services for the safekeeping of Securities and other assets related to Securities and other services, including receiving dividends, interest, and other rights, settling Securities transactions, and representing account holders who are its customers.
12. Property Insurance Company is an insurance company that provides services in handling risks of loss, loss of benefits, and legal liability to third parties, arising from uncertain events.
13. Life Insurance Company is an insurance company that provides services in handling risks associated with the life or death of an insured person.
14. Pension Fund is a legal entity that manages and runs a program promising pension benefits.
15. Financing Company is a business entity that conducts financing activities in the form of providing funds or capital assets as referred to in legislation concerning financing companies.
16. Pawn Company is a business entity established to disburse loan funds to customers by accepting movable goods as collateral.
17. Guarantee Company is a legal entity operating in the financial field with the main business activity of providing guarantees.

Article 2
Consumer Protection applies the principles:
a. transparency; b. fair treatment;
c. reliability;
d. confidentiality and security of Consumer data/information; and e. handling of complaints and settlement of Consumer disputes simply, quickly, and at affordable costs.

CHAPTER II
CONSUMER PROTECTION PROVISIONS IN THE FINANCIAL SERVICES SECTOR

Article 3
Financial Service Business Actors have the right to ensure the existence of Consumer good faith and to obtain accurate, honest, clear, and non-misleading information and/or documents regarding Consumers.

Article 4
(1) Financial Service Business Actors are required to provide and/or convey information regarding products and/or services that is accurate, honest, clear, and non-misleading. (2) Information as referred to in paragraph (1) must be documented in documents or other means that can be used as evidence. (3) Information as referred to in paragraph (1) must:
a. be conveyed when explaining to the Consumer regarding their rights and obligations; b. be conveyed when making an agreement with the Consumer; and
c. be included when conveyed through various media, including advertisements in print or electronic media.

Article 5
Financial Service Business Actors are required to convey up-to-date and easily accessible information to Consumers regarding products and/or services.

Article 6
(1) Financial Service Business Actors are required to convey information to Consumers regarding the acceptance, postponement, or rejection of product and/or service requests. (2) In the event that the Financial Service Business Actor conveys information regarding the postponement or rejection of product and/or service requests as referred to in paragraph (1), the Financial Service Business Actor is required to convey the reasons for the postponement or rejection, unless otherwise regulated by legislation.

Article 7
(1) Financial Service Business Actors are required to use simple terms, phrases, and/or sentences in Indonesian that are easily understood by Consumers in every document that:
a. contains the rights and obligations of the Consumer; b. can be used by the Consumer to make decisions; and
c. contains requirements and can legally bind the Consumer.
(2) The Indonesian language in documents as referred to in paragraph (1) may be accompanied by other languages if necessary.
(3) Financial Service Business Actors are required to use letters, writing, symbols, diagrams, and signs that can be read clearly.
(4) Financial Service Business Actors are required to provide explanations for terms, phrases, sentences, and/or symbols, diagrams, and signs that are not yet understood by the Consumer. (5) In the event that documents as referred to in paragraph (1) use foreign languages based on applicable legislation, the foreign language must be accompanied by the Indonesian language.

Article 8
(1) Financial Service Business Actors are required to compile and provide a summary of product and/or service information.
(2) The summary of product and/or service information as referred to in paragraph (1) must be made in writing, containing at least:
a. benefits, risks, and costs of the product and/or service; and b. terms and conditions.

Article 9
Financial Service Business Actors are required to provide understanding to Consumers regarding the rights and obligations of Consumers.

Article 10
(1) Financial Service Business Actors are required to provide information regarding costs that must be borne by the Consumer for every product and/or service provided by the Financial Service Business Actor. (2) Financial Service Business Actors are prohibited from providing facilities automatically that result in additional costs without the written consent of the Consumer.

Article 11
(1) Before the Consumer signs documents and/or product and/or service agreements, the Financial Service Business Actor is required to convey documents containing the terms and conditions of the product and/or service to the Consumer. (2) The terms and conditions of the product and/or service as referred to in paragraph (1) must contain at least:
a. details of costs, benefits, and risks; and b. service procedures and complaint handling and settlement at the Financial Service Business Actor.

Article 12
(1) Financial Service Business Actors are required to inform Consumers of every change in benefits, costs, risks, terms, and conditions contained in documents and/or agreements regarding the product and/or service of the Financial Service Business Actor. (2) Information as referred to in paragraph (1) must be notified to the Consumer at the latest 30 (thirty) working days before the implementation of changes in benefits, costs, risks, terms, and conditions for the product and/or service of the Financial Service Business Actor. (3) In the event that the Consumer does not agree to changes to the terms of the product and/or service as referred to in paragraph (1), then the Consumer has the right to terminate the product and/or service without being charged any compensation. (4) In the event that the Consumer has been given time to convey their opinion as referred to in paragraph (2) and the Consumer does not provide an opinion, then the Financial Service Business Actor considers the Consumer to have agreed to the changes.

Article 13
Financial Service Business Actors are required to compile guidelines for setting costs or prices of financial service products and/or services.

Article 14
(1) Financial Service Business Actors are required to conduct education to increase financial literacy among Consumers and/or the public.
(2) The plan for conducting education as referred to in paragraph (1) must be compiled in an annual program and reported to the Financial Services Authority.
(3) Further provisions regarding the report on the plan for conducting education as referred to in paragraph (2) are regulated in a Circular Letter of the Financial Services Authority.

Article 15
(1) Financial Service Business Actors are required to provide equal access to every Consumer according to Consumer classification for the products and/or services of the Financial Service Business Actor. (2) Consumer classification as referred to in paragraph (1) can be conducted by the Financial Service Business Actor based on:
(a) the background of the Consumer;
(b) information regarding employment;
(c) average income;
(d) intent and purpose of using the product and/or service of the Financial Service Business Actor; or (e) other information used to determine Consumer classification.

Article 16
Financial Service Business Actors are required to consider the suitability between the needs and capabilities of the Consumer and the products and/or services offered to the Consumer.

Article 17
Financial Service Business Actors are prohibited from using marketing strategies for products and/or services that harm Consumers by exploiting the condition of Consumers who have no other choice in making decisions.

Article 18
(1) Financial Service Business Actors may sell products and/or services in one package with other products and/or services (bundling product/service).
(2) In the event that the Financial Service Business Actor sells products and/or services as referred to in paragraph (1), then:
a. The Financial Service Business Actor is prohibited from forcing the Consumer to buy other products and/or services in the product and/or service package; and b. The Consumer can choose other providers of products and/or services in the product and/or service package. (3) In the event that other products and/or services in the offered product and/or service package are the Consumer's choice, then the risk regarding that choice becomes the responsibility of the Consumer.

Article 19
Financial Service Business Actors are prohibited from offering products and/or services to Consumers and/or the public through personal communication means without the Consumer's consent.

Article 20
(1) Financial Service Business Actors are required to include and/or mention in every offer or promotion of products and/or services:
a. the name and/or logo of the Financial Service Business Actor; and b. a statement that the Financial Service Business Actor is registered and supervised by the Financial Services Authority. (2) In the event that the sale of products and/or services can only be conducted by individuals registered with the Financial Services Authority, in the offer or promotion as referred to in paragraph (1), it is required to include a statement that the individual concerned is registered and supervised by the Financial Services Authority.

Article 21
Financial Service Business Actors are required to ensure balance, fairness, and reasonableness in making agreements with Consumers.

Article 22
(1) In the event that the Financial Service Business Actor uses standard agreements, the standard agreement must be compiled in accordance with legislation.
(2) Standard agreements as referred to in paragraph (1) can be in digital or electronic form to be offered by the Financial Service Business Actor through electronic media. (3) Standard agreements as referred to in paragraph (2) used by the Financial Service Business Actor are prohibited from:
a. stating the transfer of responsibility or obligations of the Financial Service Business Actor to the Consumer; b. stating that the Financial Service Business Actor has the right to refuse the return of money already paid by the Consumer for products and/or services purchased;
c. stating the granting of power of attorney from the Consumer to the Financial Service Business Actor, either directly or indirectly, to take any unilateral actions regarding goods pledged by the Consumer, except for unilateral actions conducted based on legislation;
d. regulating the burden of proof by the Consumer, if the Financial Service Business Actor states that the loss of utility of the product and/or service purchased by the Consumer is not the responsibility of the Financial Service Business Actor; e. granting rights to the Financial Service Business Actor to reduce the utility of the product and/or service or reduce the assets of the Consumer that are the object of the product and service agreement; f. stating that the Consumer is subject to new, additional, subsequent, and/or changed rules made unilaterally by the Financial Service Business Actor during the period the Consumer utilizes the purchased product and/or service; and/or g. stating that the Consumer grants power of attorney to the Financial Service Business Actor for the imposition of mortgage rights, pawn rights, or guarantee rights over products and/or services purchased by the Consumer on an installment basis.

Article 23
(1) Financial Service Business Actors, sales agents, and managers/employees of the Financial Service Business Actor are required to avoid conflicts of interest between the Financial Service Business Actor and the Consumer. (2) Financial Service Business Actors are required to provide information regarding the existence of conflicts of interest or potential conflicts of interest.

Article 24
Financial Service Business Actors are required to provide special services to Consumers with special needs.

Article 25
Financial Service Business Actors are required to ensure the security of Consumer deposits, funds, or assets that are under the responsibility of the Financial Service Business Actor.

Article 26
Financial Service Business Actors are required to provide proof of ownership of products and/or utilization of services to Consumers promptly in accordance with the agreement with the Consumer.

Article 27
Financial Service Business Actors are required to provide reports to Consumers regarding the balance position and transactions of Consumer deposits, funds, assets, or obligations accurately, promptly, and in a manner or means in accordance with the agreement with the Consumer.

Article 28
Financial Service Business Actors are required to execute Consumer instructions in accordance with the agreement with the Consumer and the provisions of legislation.

Article 29
Financial Service Business Actors are required to be responsible for losses suffered by Consumers arising from errors and/or negligence by managers, employees of the Financial Service Business Actor, and/or third parties working for the benefit of the Financial Service Business Actor.

Article 30
(1) Financial Service Business Actors are required to prevent managers, supervisors, and employees from behaviors:
a. enriching or benefiting themselves or other parties, b. abusing authority, opportunity, or means available to them due to their position or status, which can harm Consumers. (2) Managers and employees of the Financial Service Business Actor are required to abide by the code of ethics in serving Consumers, which has been established by each Financial Service Business Actor. (3) Financial Service Business Actors are required to be responsible to Consumers for actions taken by third parties acting on behalf of the Financial Service Business Actor.

Article 31
(1) Financial Service Business Actors are prohibited from providing data and/or information regarding their Consumers to third parties in any way.
(2) The prohibition as referred to in paragraph (1) is excepted in the event:
a. the Consumer provides written consent; and/or b. it is mandated by legislation.
(3) In the event that the Financial Service Business Actor obtains data and/or personal information of a person and/or a group of people from another party and the Financial Service Business Actor will use such data and/or information to carry out its activities, the Financial Service Business Actor must have a written statement that the other party concerned has obtained written consent from the person and/or group of people concerned to provide the personal data and/or information to any party, including the Financial Service Business Actor. (4) Cancellation or partial change of consent regarding the disclosure of data and/or information as referred to in paragraph (1) letter a is conducted in writing by the Consumer in the form of a statement letter.

Article 32
(1) Financial Service Business Actors are required to have and implement a service and complaint handling and settlement mechanism for Consumers.
(2) The service and complaint handling and settlement mechanism as referred to in paragraph (1) must be notified to the Consumer.

Article 33
Financial Service Business Actors are prohibited from charging any costs to the Consumer for filing a complaint.

Article 34
(1) Financial Service Business Actors are required to periodically report the existence of Consumer complaints and follow-up on the service and settlement of such complaints to the Financial Services Authority, in this case, the Executive Head who supervises the activities of the Financial Service Business Actor. (2) The report as referred to in paragraph (1) must be submitted at the latest on the 10th (ten) of every 3 (three) months. If the 10th (ten) falls on a holiday, then the submission of the said report is conducted on the first working day after the said holiday.

Article 35
(1) Financial Service Business Actors are required to immediately follow up and settle complaints at the latest 20 working days after the date of receipt of the complaint. (2) In the event of specific conditions, the Financial Service Business Actor may extend the time limit by at most 20 working days thereafter. (3) Specific conditions as referred to in paragraph (2) are:
a. the office of the Financial Service Business Actor receiving the complaint is not the same as the office of the Financial Service Business Actor where the complained issue occurred, and there are communication obstacles between the two offices of the Financial Service Business Actor; b. the financial transaction complained about by the Consumer requires special research into the documents of the Financial Service Business Actor; and/or
c. there are other matters beyond the control of the Financial Service Business Actor, such as the involvement of third parties outside the Financial Service Business Actor in the financial transaction conducted by the Consumer.
(4) Extension of the complaint settlement time limit as referred to in paragraph (2) must be notified in writing to the Consumer who filed the complaint before the time limit as referred to in paragraph (1) expires.

Article 36
(1) Financial Service Business Actors are required to have a work unit and/or function to handle and settle complaints submitted by Consumers.
(2) The authority of the work unit and/or function as referred to in paragraph (1) must be regulated in the service and complaint handling and settlement mechanism as referred to in Article 32. (3) Financial Service Business Actors are required to appoint 1 (one) employee in every office of the Financial Service Business Actor to handle the settlement of Consumer complaints.

Article 37
In the event that a Consumer complaint regarding a transaction or activity involves an employee of the Financial Service Business Actor who has the authority to handle the complaint or an employee of the Financial Service Business Actor who settles the complaint, then the handling and settlement of the complaint must be conducted by another employee.

Article 38
After receiving a Consumer complaint, the Financial Service Business Actor is required to conduct:
a. internal examination of the complaint competently, correctly, and objectively; b. analysis to ensure the truthfulness of the complaint; and
c. convey an apology and offer compensation (redress/remedy) or improvement of products and/or services, if the Consumer complaint is true.

Article 39
(1) In the event that an agreement on complaint settlement is not reached, the Consumer can conduct dispute settlement outside of court or through the court.
(2) Dispute settlement outside of court as referred to in paragraph (1) is conducted through alternative dispute resolution institutions.
(3) In the event that dispute settlement is not conducted through an alternative dispute resolution institution as referred to in paragraph (2), the Consumer can submit a request to the Financial Services Authority to facilitate the settlement of Consumer complaints suffered by actors in the Financial Service Business Actor.

CHAPTER III
CONSUMER COMPLAINTS AND PROVISION OF FACILITIES FOR COMPLAINT SETTLEMENT BY THE FINANCIAL SERVICES AUTHORITY

Article 40
(1) Consumers can submit complaints indicating disputes between the Financial Service Business Actor and the Consumer to the Financial Services Authority.
(2) Consumers and/or the public can submit complaints indicating violations of provisions of legislation in the financial services sector to the Financial Services Authority. (3) Complaints as referred to in paragraph (1) and paragraph (2) are submitted to the Financial Services Authority, in this case, the Member of the Board of Commissioners specializing in education and Consumer protection.

Article 41
The provision of facilities for the settlement of Consumer complaints by the Financial Services Authority is conducted against complaints indicating disputes in the financial services sector as referred to in Article 40 paragraph (1) and must meet the following requirements:
a. The Consumer suffers financial losses caused by:

1. Financial Service Business Actors in the Banking, Capital Market, Pension Fund, Life Insurance, Financing, Pawn Company, or Guarantee Company sectors, at most amounting to IDR 500,000,000.00 (five hundred million rupiah);
2. Financial Service Business Actors in the general insurance sector, at most amounting to IDR 750,000,000.00 (seven hundred fifty million rupiah);
   b. The Consumer submits a written request accompanied by supporting documents related to the complaint;
   c. The Financial Service Business Actor has conducted efforts to settle the complaint but the Consumer cannot accept the settlement or has passed the time limit as established in this Financial Services Authority Regulation;
   d. the submitted complaint is not a dispute currently in process or previously decided by an arbitration institution or court, or other mediation institutions; e. the submitted complaint is civil in nature; f. the complaint...

f. complaints submitted have never been facilitated by the Financial Services Authority; and

g. the submission of complaint resolution does not exceed 60 (sixty) working days from the date of the complaint resolution result letter delivered by the Financial Service Business Actor to the Consumer.

Article 42
The provision of complaint resolution facilities implemented by the Financial Services Authority as referred to in Article 41 is an effort to bring Consumers and Financial Service Business Actors together to fundamentally review issues in order to obtain a settlement agreement.

Article 43
The Financial Services Authority appoints facilitators to carry out the function of complaint resolution.

Article 44
The Financial Services Authority initiates the facilitation process after the Consumer and the Financial Service Business Actor agree to be facilitated by the Financial Services Authority, which is documented in a facilitation agreement containing:
a. an agreement to choose complaint resolution facilitated by the Financial Services Authority; and b. approval to comply with and be subject to the facilitation rules established by the Financial Services Authority.

Article 45
(1) The facilitation process until the signing of the Settlement Deed is carried out within a maximum period of 30 (thirty) working days from the date the Consumer and the Financial Service Business Actor sign the facilitation agreement as referred to in Article 44. (2) The facilitation process period as referred to in paragraph (1) may be extended by another 30 (thirty) working days based on the Consumer and Financial Service Business Actor Settlement Deed.

Article 46
(1) Agreements between the Consumer and the Financial Service Business Actor resulting from the facilitation process as referred to in Article 45 are documented in a Settlement Deed signed by the Consumer and the Financial Service Business Actor. (2) In the event that no agreement is reached between the Consumer and the Financial Service Business Actor, the disagreement is documented in the Financial Services Authority facilitation result minutes signed by the Consumer and the Financial Service Business Actor.

CHAPTER IV
INTERNAL CONTROL

Article 47
(1) The Board of Directors or management of the Financial Service Business Actor is responsible for compliance with the implementation of the provisions of this Regulation. (2) The Board of Commissioners or supervisors of the Financial Service Business Actor conduct supervision over the implementation of the Board of Directors' or management's responsibilities regarding compliance with the implementation of the provisions of this Regulation.

Article 48
(1) Financial Service Business Actors are required to have a supervision system for the Board of Directors or management in the context of Consumer protection.
(2) Financial Service Business Actors are required to form a reporting system to ensure the optimal supervision of the Board of Directors or management regarding compliance with this Regulation.

Article 49
(1) Financial Service Business Actors are required to have and implement written Consumer protection policies and procedures.
(2) The policies as referred to in paragraph (1) must be documented in operational standard procedures, which then serve as guidelines in all operational activities of the Financial Service Business Actor. (3) The policies and procedures as referred to in paragraph (1) must be complied with by the management and employees of the Financial Service Business Actor.

Article 50
(1) Financial Service Business Actors are required to have an internal control system related to Consumer protection.
(2) The internal control system as referred to in paragraph (1) must at least cover:
a. the Financial Service Business Actor's compliance with the implementation of Consumer protection principles; and b. reporting and monitoring systems regarding the follow-up of Consumer complaints.

CHAPTER V
SUPERVISION OF CONSUMER PROTECTION IN THE FINANCIAL SERVICES SECTOR

Article 51
(1) The Financial Services Authority conducts compliance supervision of Financial Service Business Actors regarding the implementation of Consumer protection provisions. (2) Supervision as referred to in paragraph (1) includes direct and indirect supervision.

Article 52
(1) In carrying out compliance supervision of Financial Service Business Actors regarding the implementation of Consumer protection provisions as referred to in Article 51, the Financial Services Authority is authorized to request data and information from Financial Service Business Actors concerning the implementation of Consumer protection provisions. (2) Requests for data and information as referred to in paragraph (1) may be conducted periodically or at any time when necessary.

CHAPTER VI
SANCTIONS

Article 53
(1) Financial Service Business Actors and/or parties who violate the provisions of this Financial Services Authority Regulation are subject to administrative sanctions, including:
a. Written warnings; b. Fines, namely the obligation to pay a certain amount of money;
c. Restriction of business activities;
d. Suspension of business activities; and e. Revocation of business licenses.
(2) Sanctions as referred to in paragraph (1) letters b, c, d, or e may be imposed with or without prior imposition of written warning sanctions as referred to in paragraph (1) letter a. (3) Fine sanctions as referred to in paragraph (1) letter b may be imposed separately or together with sanctions as referred to in paragraph (1) letters c, d, or e. (4) The amount of fine sanctions as referred to in paragraph (1) letter b is determined by the Financial Services Authority based on regulations regarding administrative sanctions in the form of fines applicable to each financial services sector. (5) The Financial Services Authority may announce the imposition of administrative sanctions as referred to in paragraph (1) to the public.

CHAPTER VII
TRANSITIONAL PROVISIONS

Article 54
Standard agreements made by Financial Service Business Actors before this Financial Services Authority Regulation comes into force must be adjusted to the provisions as regulated in Article 22 at the latest when this Financial Services Authority Regulation comes into force.

CHAPTER VIII
CLOSING PROVISIONS

Article 55
Implementation provisions regulating Consumer protection in the financial services sector remain valid as long as they do not conflict with this Financial Services Authority Regulation.

Article 56
Financial Service Business Actors are required to have internal completeness to implement this Financial Services Authority Regulation for a maximum of 1 (one) year calculated from the date this Financial Services Authority Regulation is enacted.

Article 57
This Financial Services Authority Regulation comes into force 1 (one) year after the date of enactment.

To ensure that everyone knows it, ordering the enactment of this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.

Established in Jakarta on 26 July 2013

CHAIRMAN OF THE COMMISSIONERS BOARD
FINANCIAL SERVICES AUTHORITY,

Signed,
MULIAMAN D. HADAD

Enacted in Jakarta on 6 August 2013

MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA,

Signed,
AMIR SYAMSUDIN

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2013 NUMBER 118 A copy in accordance with the original HEAD OF LEGAL ASSISTANCE DIVISION LAW DIRECTORATE,

Signed,
MUFLI ASMAWIDJAJA

Application...
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA
EXPLANATION
OF
FINANCIAL SERVICES AUTHABILITY REGULATION
NUMBER: 1/POJK.07/2013
ON
CONSUMER PROTECTION IN THE FINANCIAL SERVICES SECTOR

I. GENERAL

Article 4 of the OJK Law states that the Financial Services Authority was formed with the objective that all financial services activities within the financial services sector are conducted in an orderly, fair, transparent, and accountable manner, and are able to realize a financial system that grows sustainably and stably, and is able to protect the interests of consumers and the public.

Globalization in the financial system and rapid advances in information technology and financial innovation have created a financial system that is highly complex, dynamic, and interconnected across financial sub-sectors in terms of products and institutions. Several matters of concern to the Financial Services Authority include integrated supervision of the financial services sector (conglomerates), uniform consumer protection practices across all financial services sectors, actions reflecting moral hazard, and suboptimal consumer protection in the financial services sector.

Consumer protection in the financial services sector aims to create a reliable Consumer protection system, enhance Consumer empowerment, and foster awareness among Financial Service Business Actors regarding the importance of Consumer protection, thereby increasing public trust in the financial services sector.

Expected tangible results include Financial Service Business Actors considering fairness in setting costs or prices for products and/or services, minimum fee-based pricing that does not harm Consumers, and the suitability of offered products and/or services with Consumer needs and capabilities.

The application of market conduct is applied in balance between developing the financial services sector and fulfilling Consumer rights and obligations to enhance Consumer trust. Market Conduct is the behavior of Financial Service Business Actors in designing, compiling, and conveying information, offering, making agreements, regarding products and/or services, as well as dispute resolution and complaint handling.

In this regard, Consumer and/or public protection efforts are directed towards achieving two main objectives. First, enhancing trust from investors and Consumers in every activity and business operation in the financial services sector (Market Confidence); and Second, providing opportunities and chances for development for Financial Service Business Actors fairly, efficiently, and transparently, while on the other hand, Consumers have an understanding of their rights and obligations in dealing with Financial Service Business Actors regarding characteristics, services, and products (Level Playing Field). In the long term, the financial industry itself will also benefit positively from driving efficiency improvements in response to demands for superior financial services.

II. ARTICLE BY ARTICLE

Article 1
Clear enough.

Article 2
Letter a
What is meant by "transparency" in this letter is the provision of information regarding products and/or services to Consumers, clearly, completely, in language that is easy to understand.

Letter b
What is meant by "fair treatment" in this letter is fair and non-discriminatory treatment of Consumers (Discriminatory is treating other parties differently based on ethnicity, religion, and race).

Letter c
What is meant by "reliability" in this letter is everything that can provide accurate services through reliable systems, procedures, infrastructure, and human resources.

Letter d
What is meant by "confidentiality and security of Consumer data/information" in this letter is actions that provide protection, maintain the confidentiality and security of Consumer data and/or information, and only use them in accordance with the interests and purposes approved by Consumers, unless otherwise determined by applicable laws and regulations.

Letter e
What is meant by "complaint handling" in this letter is the provision and/or resolution of complaints.
What is meant by "dispute resolution" is implementing mediation agreements or adjudication decisions.

Article 3
Clear enough.

Article 4
Paragraph (1)
Clear enough.

Paragraph (2)
Clear enough.

Paragraph (3)
Letter a
Clear enough.

Letter b
Clear enough.

Letter c
Clear enough.

Article 5
Clear enough.

Article 6
Paragraph (1)
Clear enough.

Paragraph (2)
As an example of the obligation of Financial Service Business Actors not to provide reasons for rejection is as follows:
A prospective savings consumer who, after due diligence, is indicated to be involved in money laundering crimes, then according to Law Number 8 of 2010 concerning the Prevention and Eradication of Money Laundering Crimes, the Financial Service Business Actor is not required to provide reasons for rejection (anti tipping-off provisions).

Article 7
Paragraph (1)
Letter a
Clear enough.

Letter b
Clear enough.

Letter c
Clear enough.

Paragraph (2)
What is meant by "other languages" in this paragraph is languages that can be used, namely regional languages or foreign languages that are easy to understand by Consumers.

Paragraph (3)
Clear enough.

Paragraph (4)
Clear enough.

Paragraph (5)
What is meant by "foreign language" in this paragraph is foreign languages used in international agreements.

Article 8
Paragraph (1)
Clear enough.

Paragraph (2)
Letter a
Clear enough.

Letter b
Clear enough.

Article 9
Clear enough.

Article 10
Paragraph (1)
Clear enough.

Paragraph (2)
As an example of the prohibition on Financial Service Business Actors providing automatic facilities resulting in additional costs without written consent from Consumers is as follows:
A Bank Financial Service Business Actor has a short message system banking facility provided to its customers without written consent by charging additional fees.

Article 11
Paragraph (1)
Clear enough.

Paragraph (2)
Letter a
Clear enough.

Letter b
Clear enough.

Article 12
Paragraph (1)
What is meant by "changes" in this paragraph is changes that include additions and reductions of benefits, costs, risks, terms, and conditions contained in documents and/or agreements regarding products and/or services of Financial Service Business Actors. Information provision can be conducted using physical or electronic means, either directly to each Consumer or in the form of announcements.

Paragraph (2)
Clear enough.

Paragraph (3)
What is meant by "Consumers are deemed not to agree" in this paragraph is Consumers who state their disagreement within 30 working days. In the event that Consumers do not agree, Consumers are not subject to compensation or penalties. As an example, deposits where interest rates change during the current year of the deposit term, so if Consumers do not agree, Consumers can terminate the products and/or services without being subject to penalties.

Paragraph (4)
Clear enough.

Article 13
In setting costs or prices for financial services products and/or services, Financial Service Business Actors consider the fairness of costs or prices, while still considering commercial aspects and healthy competition in conducting business.

Article 14
Paragraph (1)
The implementation of education is intended to increase financial literacy consisting of knowledge, skills, and access in the financial services sector for Consumers and/or the public.

Paragraph (2)
In principle, reports regarding the implementation plan of education are reported once a year, and the reporting is attempted to be consolidated with reports conducted by Financial Service Business Actors, for example, reports conducted by Banks in the Bank Business Plan (RBB). Reports on the implementation plan of education can be submitted together with other annual reports.

Paragraph (3)
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Article 15
Paragraph (1)
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Paragraph (2)
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Article 16
As an example of considering suitability with Consumer needs and capabilities is as follows:
Consumers considered according to needs are those who place their funds or are creditors (suitability), while Consumers considered according to capability are those who borrow funds or are debtors (affordability).

Article 17
As an example, Consumers experiencing a tragedy such as a sick child and having no money, while simultaneously being offered an Unsecured Loan by a Financial Service Business Actor employee because the Consumer has no money for hospital costs, ultimately taking the loan without considering the ability to pay.

Article 18
Paragraph (1)
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Paragraph (2)
Letter a
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Letter b
An example of the provisions in this letter is a Financing Company offering a financing package for the purchase of motor vehicles by adding loss insurance services in cooperation with Insurance Company A. The Financing Company in question cannot force Consumers to choose insurance services from Insurance Company A, but Consumers can choose insurance services other than Insurance Company A.

Paragraph (3)
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Article 19
What is meant by "personal communication media" in this paragraph is personal communication means, for example, email, short message system, and voicemail.

Article 20
Paragraph (1)
Letter a
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Letter b
What is meant by "registered" in this letter is obtaining business licenses, approvals, registrations, validations, or statements of effectiveness from the Financial Services Authority.

Paragraph (2)
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Article 21
Balance in making agreements, for example, in the event that Consumers have provided honest and non-misleading information and documents, Financial Service Business Actors are required to store and use such information and documents solely for the benefit of Consumers. Fairness in making agreements, for example, in the event that Consumers have agreed to pay for products and/or services from Financial Service Business Actors, Financial Service Business Actors must also provide the said products and/or services in accordance with the agreement. As an example of fairness in making agreements, for example, the setting of prices or costs charged for products and/or services must be in accordance with the costs incurred.

Article 22
Paragraph (1)
Standard agreements as referred to in this paragraph are written agreements established unilaterally by Financial Service Business Actors and contain standard clauses regarding content, form, and/or method of creation, and are used to offer products and/or services to Consumers on a mass scale.

Paragraph (2)
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Paragraph (3)
Letter a
Financial Service Business Actors issuing products and/or services are prohibited from containing standard clauses stating that products and/or services used by Consumers are not the responsibility of the Financial Service Business Actor if there are problems. In a credit card issuance agreement stating:
"Cardholders release the Credit Card Issuer from responsibility and the provision of compensation in any form that may arise from complaints or lawsuits filed by cardholders or their proxies." This standard clause shifts responsibility that legally belongs to the business actor onto Consumers through the agreement.

Letter b
Consumers cannot cancel the purchase of products and/or services and request the return of their money because the products and/or services do not match the agreement. Example of a standard clause in a house sales and purchase agreement, stating:
"Booking fee is valid for 7 days and if payment is not made within 7 days, it is considered a withdrawal of intent, and the developer has the right to sell the goods again."

Letter c
This provision confirms that Financial Service Business Actors can take unilateral action over objects pledged by Consumers, if between Consumers and Financial Service Business Actors there is a separate agreement that is accessory to the main obligation regarding the purchase of products and/or financial services. Example:
If in motor vehicle financing burdened with fidusia guarantees, Financial Service Business Actors can execute objects that are the subject of fidusia guarantees, without the consent of the financing Consumer, because fidusia guarantees are based on laws regarding fidusia guarantees.

Letter d
Examples of prohibited standard clauses in this letter are:
"In a lawsuit, complaint, or other matter where Financial Service Business Actors state that damage or loss, directly or indirectly, is caused by one or more risks excluded in these provisions, then it is the Consumer's obligation to prove otherwise." Such standard clauses contradict the legal principle of proof stating that whoever asserts must prove.

Letter e
Clear enough.

Letter f
Examples of prohibited standard clauses in this letter are:
New account opening agreements at Financial Service Business Actors, stating:
"Subject to the terms and conditions applicable at the Financial Service Business Actor along with all changes, becoming an inseparable part of this account application form." Based on the principle of propriety, parties are bound by the terms of the agreement that should have been known beforehand. Parties cannot possibly know and understand terms that do not yet exist.

Letter g
Financial Service Business Actors, if imposing mortgage rights, pledge rights, or guarantee rights over products and/or services purchased by Consumers in installments, must use separate power of attorney documents from the main agreement.

Article 23
Paragraph (1)
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Paragraph (2)
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Article 24
What is meant by "special needs" in this article is specifically limited to blind, deaf, and elderly persons aged 60 years or older.
What is meant by "special services" in this article includes, for example, providing forms using Braille.

Article 25
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Article 26
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Article 27
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Article 28
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Article 29
What is meant by "errors and/or negligence" in this article is errors and/or negligence in conducting the business activities of Financial Service Business Actors, whether carried out by management, employees of Financial Service Business Actors, and/or third parties working for the benefit of Financial Service Business Actors.

Article 30
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Letter a
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Letter b
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Paragraph (3)
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Article 31
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Paragraph (2)
Letter a
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Letter b
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Paragraph (3)
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Paragraph (4)
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Article 32
Paragraph (1)
Services and complaint resolution as referred to in this paragraph include if, after receiving a complaint from Consumers, a dispute occurs, namely differences of opinion between Consumers and Financial Service Business Actors related to the implementation of the rights and obligations of the parties.

Paragraph (2)
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Article 33
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Article 34
Paragraph (1)
Reporting is conducted in the form of written reports and/or through integrated system mechanisms provided by the Financial Services Authority.
As an example, if a Custodian Bank receives a complaint from Consumers, account holders holding securities, then the report and its follow-up are submitted to the Head of the Capital Market Supervisory Executive.

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Article 35
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Paragraph (2)
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Paragraph (3)
Letter a
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Letter b
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Letter c
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Article 36
Paragraph (1)
What is meant by submitting documents in this paragraph is the submission of documents directly to the office of the Financial Service Business Actor or submission of documents in writing.

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Paragraph (3)
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Article 37
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Article 38
Letter a
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Letter b
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Letter c
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Article 39
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Article 40
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Article 41
Letter a
The financial losses meant here are the value of the dispute.

Letter b
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Letter c
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Letter d
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Letter e
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Letter f...

Letter f
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Letter g
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Article 42
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Article 43
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Article 44
Letter a
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Letter b
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Article 45
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Article 46
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Article 47
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Article 48
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Article 49...

Article 49
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Article 50
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Letter a
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Letter b
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Article 51
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Article 52
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Article 53
Paragraph (1)
This type of administrative sanction is a type of sanction that can be imposed by the Financial Services Authority against violations of this OJK Regulation, taking into account supervisory aspects regarding the Party subject to the said sanction.

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Article 54...

Article 54
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Article 55
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Article 56
The term "internal completeness" in this paragraph includes, among others, guidelines for setting costs or prices of financial services products and services, a code of ethics for Consumer service, regulations regarding consumer complaint mechanisms, standard operating procedures regarding written policies and procedures for Consumer protection, internal control systems related to Consumer protection, as well as work units and/or functions to handle and resolve Consumer complaints.

Article 57
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SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 5431 ---