Blockchain Based Consumer Protection Against Debt Collector Misconduct in Fintech Industry in Indonesia

Abstract

This study examines the urgency of digital consumer protection against debt collector misconduct in Indonesia’s fintech lending industry. The rapid growth of digital financial services has expanded financial inclusion, but it has also created new risks for consumers, including intimidation, threats, psychological pressure, and misuse of personal data during debt collection processes. This study aims to analyze the forms of debt collector misconduct, evaluate the effectiveness of existing consumer protection regulations, and propose a blockchain-based protection framework for improving transparency, accountability, and consumer safety. Using a normative juridical approach supported by conceptual analysis, this study reviews consumer protection laws, fintech regulations, and recent literature on blockchain governance, smart contracts, decentralized identity, and digital audit trails. The findings show that current regulatory mechanisms remain insufficient to address illegal fintech platforms and unethical debt collection practices because supervision is often fragmented, reactive, and difficult to verify. Therefore, this study proposes the integration of blockchain-based audit trails, smart contract complaint mechanisms, and decentralized identity protection to strengthen evidence recording, prevent data misuse, and improve regulatory accountability. The study contributes to the development of digital consumer protection by connecting legal analysis with blockchain applications in fintech governance. It also supports SDGs 8 by promoting safer and more inclusive digital financial services, and SDGs 16 by strengthening justice, accountability, and institutional trust in the digital financial ecosystem.