Digital Lending in Smart Society: Legal and Sharia Perspectives on Consumer Privacy and Ethical Collection Practices

¹ Faculty of Law, Universitas Muhammadiyah Yogyakarta, Indonesia
² Faculty of Sharia and Law, Universitas Islam Negeri Sunan Kalijaga, Indonesia

^* Corresponding author: khaeruddin@umy.ac.id

Abstract

The digitalization era has revolutionized Indonesia’s financial landscape through rapid advancements in Financial Technology (fintech), guided by regulatory frameworks such as the Financial Services Authority Regulation No. 10 of 2022 and Law No. 27 of 2022 on Personal Data Protection. This research employs a doctrinal legal approach to analyze these regulations’ impact on digital lending and examines debt collection mechanisms under POJK No. 10 of 2022 and Islamic law. Emphasizing compliance with regulatory standards, the study underscores the importance of ethical debt collection practices in mitigating risks associated with illicit fintech activities. Furthermore, it explores how these practices contribute to building a smart society by fostering consumer awareness of privacy rights and promoting sustainable digital governance. In Islamic law, debt collection is permissible within defined ethical boundaries derived from the Quran, Hadith, and scholarly interpretations. Actions that deviate from these principles contravene Sharia norms and societal values. This research contributes to understanding the intersection of digitalization, consumer privacy, and ethical standards, crucial for advancing smart society initiatives in Indonesia’s evolving fintech sector.