Trapped in the Web: How FOMO Leads to Online Lending Scams

Online Lending and Fraud Investing are now very common in Indonesia, as more and more people are turning to the internet for financial opportunities. With the convenience of online platforms, individuals can easily access various investment options and participate in leading programs. However, this rise in popularity has also led to an increase in fraudulent activities, with scammers taking advantage of unsuspecting investors. It is crucial for individuals to exercise caution and conduct thorough research before engaging in any online lending or investing activities to protect themselves from potential fraud. 

One of the reasons for the flourishing of fraudulent investing in Indonesia is the relatively low level of financial literacy. A survey by the Indonesian Financial Services Authority (OJK) showed that despite a high level of financial inclusion (85.10%), the level of financial literacy is still at 49.68%. The gap between financial inclusion and literacy suggests that many individuals in Indonesia may not fully understand the risks and complexities involved in online lending and investing. This lack of knowledge makes them more susceptible to falling victim to fraudulent schemes, highlighting the importance of conducting thorough research and seeking professional advice before making any financial decisions. Additionally, efforts should be made to improve financial education and literacy programs in order to bridge the gap and empower individuals to make informed choices regarding their finances.  

In addition, several studies, including those by April (2022) and Modjo & Santoso (2022), demonstrated that many Indonesians, particularly young Indonesians, are involved in online lending and trapped in fraud investing because of FOMO. These studies highlight the urgent need for increased awareness and regulation in the online lending industry to protect vulnerable individuals from falling victim to fraudulent schemes. Furthermore, it is crucial for policymakers and financial institutions to collaborate in developing stricter guidelines and safeguards to ensure the responsible and ethical practices of online lenders. 

The BINUS Finance International Program is committed to this cause by educating students about the risks and warning signs of fraudulent investment schemes. Through courses and workshops, students are equipped with the knowledge and skills to make informed financial decisions and protect themselves from potential scams. Additionally, the BINUS Finance International Program actively engages with industry experts and regulatory bodies to stay updated on emerging trends in online lending and advocate for stronger consumer protection measures.