This is How Much Debt Collectors in Indonesia Earn for Each Repossessed Overdue Vehicle

Jakarta, CNBC Indonesia - Customers who borrow money often face debt collectors if they fail to repay after the stipulated deadline. Debt collectors are often negatively connoted, especially if debt collection methods do not comply with applicable regulations. However, did you know that debt collectors can actually earn substantial income? A practitioner in Asset Recovery Management at one of Indonesia’s vehicle leasing companies, Budi Baonk, revealed that payments to debt collectors for vehicle credit delinquency cases are determined based on agreements with the leasing company. The commission or fee for repossessing leasing assets is agreed upon when the power of attorney is issued from the Leasing Company to the External Debt Collection Service Company. The range of payments, according to Budi Baonk, is usually around Rp5 million to Rp20 million. “The range of prices (debt collector fees) is the smallest Rp5 million to Rp20 million,” Budi told CNBC Indonesia in 2023. The amount of the debt collector fee, according to Budi, depends on the type of vehicle unit secured. For example, if the car is a new release, it will be more expensive than an old production car. Prices can also vary depending on the debt collector business entity itself. Usually, the determination is set based on the company’s track record variables. For information, the debt collector profession is permitted under POJK 22 of 2023 on financial services institutions. However, Article 62 of the regulation stipulates that financial services institutions must ensure that collection from consumers is carried out in accordance with societal norms and applicable legal provisions. Thus, financial services institutions must ensure that collection is done without threats and actions that humiliate consumers. Collection must not intimidate and must not be done continuously. The regulation also states that collection is carried out at the collection address or consumer’s domicile on Mondays to Saturdays outside national holidays from 08.00 to 20.00 local time. Debt collectors are allowed to collect outside the specified place and time, but with prior consumer approval. OJK reminds consumers not only to demand consumer protection rights but also to be responsible in making payments. If consumers cannot pay, OJK suggests that consumers actively request restructuring from financial institutions. However, the final decision on restructuring is the right of the financial company. OJK also emphasises that it will not protect naughty consumers who act in bad faith in credit payments. “OJK will not protect naughty consumers,” stressed Deputy Commissioner for Supervision of Financial Services Business Actors’ Behaviour and Consumer Protection Sarjito.