Best Practice Study of Consumer Protection in Countering Illegal Investment in Indonesia and Singapore
DOI:
https://doi.org/10.37253/conescintech.v6i1.12804Keywords:
Consumer Protection, Illegal Investment, Fintech, Comparative StudyAbstract
The digital transformation within the financial services sector has triggered a massive surge in the adoption of financial technology (fintech) investment platforms in Indonesia and Singapore. However, this phenomenon is accompanied by a proliferation of cross-border cyber-based illegal investment schemes that exploit information asymmetry and the vulnerability of retail consumers. This study aims to analyze the current positive legal frameworks (ius constitutum) governing consumer protection in combating illegal investments in both countries and to formulate an ideal regulatory model (ius constituendum) for Indonesian national law by adopting best practices from Singapore. Using a normative legal research methodology, this study employs statutory, conceptual, case, and comparative approaches. The findings reveal acute legal gaps in Indonesian regulations: supervisory actions by the Financial Services Authority (OJK) remain reactive and domestically confined, cyber law enforcement is hindered by bureaucratic red tape, and the dispute resolution system through LAPS SJK lacks strong executorial power. Conversely, Singapore, through the Monetary Authority of Singapore (MAS), successfully mitigates risks preventively by leveraging the Disclosure-Based Regulation doctrine, extending extraterritorial jurisdiction via the FSMA 2022, operating an Investor Alert List integrated automatically with the banking sector, and enforcing binding compensation schemes through FIDREC. Based on these findings, this study recommends that legislators and the OJK urgently reconstruct national regulations by adopting risk-based regulation, granting independent and instant digital takedown authority to the OJK, applying the shifting burden of proof doctrine to electronic transactions, and establishing an Investor Compensation Fund to guarantee the recovery of financial rights for victims of illegal investments in Indonesia.
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