How Businesses Can Avoid Violating Consumer Rights in Indonesia

May 27, 2025 | News

Businesses Avoid Violating Consumer Rights

As Indonesia’s digital economy continues to grow rapidly, so do the legal expectations surrounding consumer protection. For foreign companies operating or planning to enter the Indonesian market, understanding local consumer rights is essential—not only for maintaining trust and brand reputation but also to avoid significant legal exposure.

Indonesian law places strong emphasis on consumer welfare, especially in transactions involving digital platforms, financial services, real estate, and retail. With increasing consumer complaints and regulatory scrutiny, businesses are expected to align with local legal standards, particularly those set by the Consumer Protection Law and agencies like the National Consumer Protection Agency (BPKN).

The Legal Foundation for Consumer Rights in Indonesia

Indonesia’s main legal framework for consumer protection is Law No. 8/1999 on Consumer Protection (UUPK). This law outlines the fundamental rights of consumers, which every business must respect:

  1. The right to safety and security when using products/services.
  2. The right to choose and obtain products/services as agreed.
  3. The right to accurate and honest information.
  4. The right to be heard regarding complaints or feedback.
  5. The right to dispute resolution and legal advocacy.
  6. The right to education and awareness as consumers.
  7. The right to fair, honest, and non-discriminatory treatment.
  8. The right to compensation if goods/services are defective or misleading.
  9. Other rights as regulated by prevailing laws.

Companies, both local and foreign, must ensure their goods and services adhere to these principles, regardless of whether they operate online or offline.For instance, businesses must provide accurate and transparent product information, guarantee product safety, and ensure customer complaints are heard and addressed. 

If a company fails to uphold these rights, consumers can take legal action through courts or consumer dispute resolution agencies (BKPN). 

BPKN and Consumer Protection in Indonesia: Handling Complaints in 2024

The BPKN is Indonesia’s national consumer protection agency. It plays a vital role in advising the government on improving consumer rights and protection policies across the country. One of BPKN’s key responsibilities is managing and resolving consumer complaints in Indonesia.

Consumer Complaints to BPKN in 2024: Key Statistics and Trends

In 2024, BPKN received 1,733 consumer complaints from various sectors, reflecting ongoing challenges faced by Indonesian consumers. The reported potential losses amounted to IDR 424,256,065,321, with approximately IDR 44,825,538,742 successfully recovered for consumers. Complaints came from a broad range of sectors, including e-commerce transactions, banking, transportation, and public services.

The housing sector led with 754 complaints, followed by the financial services sector with 488 reports. This imbalance highlights ongoing gaps between business actors and consumers, particularly regarding access to justice and transparent information.

How BPKN Handles Consumer Complaints in Indonesia

The complaint resolution process at BPKN generally includes:

  1. Receipt and Verification of Complaints
    Consumers submit complaints through official BPKN channels, both online and offline.
  2. Mediation and Recommendations
    BPKN facilitates mediation between consumers and business actors and issues recommendations for resolving disputes.
  3. Referral to Relevant Ministries or Agencies
    In some cases, complaints are forwarded to appropriate government ministries for further enforcement.

Business Obligations Under Article 7 UUPK: What Companies Must Know

Under Article 7 of the Undang-Undang Perlindungan Konsumen (UUPK), business actors in Indonesia are legally obligated to:

  1. Act in good faith in all business activities;
  2. Provide accurate, clear, and honest information about goods and/or services, including usage, repair, and maintenance;
  3. Treat consumers fairly, honestly, and without discrimination;
  4. Ensure product and service quality meets applicable standards;
  5. Allow consumers to test or try goods/services and provide warranties;
  6. Compensate consumers for losses from the use of goods or services;
  7. Provide compensation if goods or services do not meet agreed terms.

These requirements show that consumer protection is a legal responsibility for companies, not just a matter of ethics or corporate social responsibility.

Legal Remedies for Consumers Under Article 45 UUPK

Failure to comply with consumer protection laws can result in administrative, civil, or criminal penalties. According to Article 45 paragraph 1 of the UUPK:

“Any consumer who suffers losses may file a lawsuit against the business actor through institutions authorized to resolve disputes between consumers and business actors or through courts within the general judiciary system.”

This provision ensures consumers have access to justice through official dispute resolution mechanisms or the courts.

Corporate Obligations: Beyond Compliance

Under Article 7 of UUPK, business operators are legally required to act in good faith, provide accurate information, offer product guarantees, and compensate for any harm caused. These aren’t just CSR goals—they’re enforceable legal standards.

Non-compliance can lead to administrative penalties, civil liability, or even criminal prosecution. This risk grows in regulated sectors like pharmaceuticals, financial services, e-commerce, and infrastructure, where failure to uphold consumer protections can also attract media and public backlash.

Building consumer trust starts from within. Foreign companies can reinforce compliance by integrating consumer protection into corporate governance policies. This includes:

  1. Establishing dedicated customer complaint units
  2. Conducting regular legal audits
  3. Providing consumer rights training to staff
  4. Publishing clear terms of service and return policies

Understanding and respecting Indonesia’s consumer protection framework is vital for foreign companies aiming for sustainable operations. Companies that adopt these strategies not only minimize legal risk but also enhance customer loyalty and brand equity in the Indonesian market..***

This article is for informational purposes only and does not constitute legal advice. Businesses facing consumer disputes in Indonesia should consult with qualified legal professionals familiar with Indonesian consumer and commercial law.

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