The research arrives at a critical moment for Indonesia’s fintech ecosystem. P2P lending platforms have become a major alternative source of financing for micro, small, and medium enterprises (MSMEs) and individuals who struggle to access traditional bank loans. Digital lending services have expanded financial inclusion across Indonesia, but rapid growth has also created opportunities for fraud, identity manipulation, and misuse of electronic financial systems.
According to the researchers, fraud in fintech lending now poses risks not only to lenders and investors, but also to public trust in Indonesia’s digital economy.
The study specifically analyzes the KoinWorks case, one of the most widely discussed fintech fraud incidents in Indonesia in recent years. KoinWorks is a licensed P2P lending platform supervised by the Financial Services Authority (OJK) and affiliated with the Indonesian Joint Funding Fintech Association (AFPI). The platform positions itself as a “Super Financial App” serving both personal and business financing needs.
However, the platform became entangled in a major fraud case involving a business group identified by the initials MPP. According to the study, the owner of the business group allegedly diverted funds intended for lenders, even though MSME borrowers within the ecosystem had already fulfilled their repayment obligations.
The estimated financial loss to lenders reportedly reached Rp365 billion.
Researchers noted that the alleged misuse of funds demonstrated intentional deception, a central element in Indonesian criminal law related to fraud offenses.
“The enforcement of criminal law against fraud perpetrators has preventive and repressive functions to maintain the integrity of the fintech ecosystem,” Wibowo and Dzulqarnain wrote in their analysis.
The study explains that borrower fraud in P2P lending can involve several illegal actions, including:
- Using fake identities
- Manipulating electronic documents
- Submitting fictitious loan applications
- Concealing real financial conditions
- Applying for multiple loans simultaneously
Under Indonesian law, such actions may violate Article 378 of the Criminal Code concerning fraud and Article 263 concerning document forgery. The misuse of electronic information may also trigger sanctions under Indonesia’s Information and Electronic Transactions Law (ITE Law).
The researchers found that borrowers who intentionally deceive lenders may face both criminal and civil liability. Criminal liability applies when fraud is proven through evidence of deliberate deception and falsification. Civil liability may arise when borrowers violate contractual obligations or commit unlawful acts that financially harm lenders.
The study also highlights the growing legal complexity surrounding fintech lending platforms themselves. Although platforms like KoinWorks formally act as electronic intermediaries rather than direct lenders, the researchers argue that fintech companies still hold administrative and professional responsibilities.
If platforms fail to implement adequate due diligence procedures, identity verification systems, or fraud detection mechanisms, they may also face legal consequences under negligence principles.
The paper points out that Indonesian fintech regulations remain too general and lack detailed operational standards for handling borrower fraud. Current rules under OJK Regulation No. 10/POJK.05/2022 establish the legal framework for P2P lending operations but do not comprehensively regulate digital fraud prevention, dispute resolution, or lender protection mechanisms.
This regulatory gap, according to the researchers, creates legal uncertainty and leaves room for exploitation by cybercriminals.
The study uses a normative juridical approach, meaning the researchers examined laws, legal doctrines, regulations, and previous legal cases to assess how existing legal instruments apply to fintech fraud. The analysis combined criminal law, civil law, consumer protection law, and digital financial regulations to evaluate accountability in the KoinWorks case.
The findings also draw attention to broader structural issues in Indonesia’s legal system. Using Lawrence M. Friedman’s legal system theory, the researchers argue that legal protection in fintech depends on three interconnected elements: legal substance, legal structure, and legal culture.
The study concludes that weaknesses exist in all three areas.
From the legal substance perspective, fintech regulations have not fully adapted to increasingly sophisticated digital fraud schemes. From the structural perspective, coordination among regulators, police, and judicial institutions remains inconsistent. Meanwhile, low public awareness of legal rights and digital financial risks weakens legal culture and consumer protection.
The researchers recommend several reforms to strengthen Indonesia’s fintech ecosystem.
Key recommendations include:
- Creating more detailed OJK technical regulations on borrower verification and fraud mitigation
- Integrating real-time identity verification systems with Indonesia’s population database
- Using artificial intelligence to detect suspicious borrower behavior
- Establishing specialized digital dispute resolution forums
- Expanding public education on digital financial literacy and legal awareness
- Improving coordination between OJK, law enforcement agencies, AFPI, and AFTECH
The paper also references international practices in countries such as the United Kingdom and Singapore, where regulators require stricter due diligence systems and advanced fraud detection technologies for digital lending platforms.
According to Wibowo and Dzulqarnain, Indonesia’s fintech industry can continue growing sustainably only if legal protection evolves alongside technological innovation.
The researchers emphasize that fintech fraud is not solely a technological problem, but also a governance and legal enforcement challenge requiring institutional reform and stronger public policy coordination.
Author Profiles
Rizki Sarwo Eddy Wibowo is a legal researcher affiliated with Gadjah Mada University, Indonesia. His academic work focuses on fintech law, consumer protection, and digital financial regulation.
Muhammad Faidzal Dzulqarnain is a researcher from Open University, Indonesia, specializing in civil law, digital transactions, and legal accountability in electronic financial systems.
Source
Article Title: “Legal Liability of Borrowers in Cases of Fraud on Peer-to-Peer Lending Platforms: A Case Study of KoinWorks”
Journal: Formosa Journal of Science and Technology (FJST)
Publication Year: 2026
DOI: https://doi.org/10.55927/fjst.v5i5.62
Official URL: https://journalfjst.my.id/index.php/fjst
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