IPB University Professor of Consumer Science: ‘Miscellaneous Fees’ in Digital Applications Violate Consumer Rights
IPB University Professor of Consumer Science, Prof Dr Lilik Noor Yuliati, MFSA, believes that hidden fees in digital transactions are increasingly detrimental to consumers. Miscellaneous fees that suddenly appear during the checkout process, she says, fall into the category of hidden costs that are often not disclosed at the beginning of the transaction.
“Such fees are often referred to as price obfuscation, which is the practice of intentionally hiding actual price information through various terms such as administrative fees, additional service fees, or other hidden costs,” she explained.
In the context of consumer protection, Prof Lilik emphasized that such practices violate consumer rights as stipulated in Law No. 8 of 1999 on Consumer Protection (UUPK).
“Article 4(c) of the UUPK explicitly states that consumers have the right to receive accurate, clear, and honest information, including regarding prices and additional fees,” she clarified.
She noted that hidden costs directly impact consumers’ perceptions of a platform. Not only do they create a sense of distrust, but they also disrupt the rational decision-making process.
“Consumers feel deceived because the initial price displayed differs from the total amount they must pay. This inevitably leads to distrust and reduces consumer loyalty,” she said.
Furthermore, Prof Lilik explained that consumer trust (brand trust) is a crucial factor in the digital business world. When consumers feel wronged, they tend not to make repeat purchases and even stop recommending the platform to others. “This is certainly dangerous for the sustainability of digital businesses,” she added.
Regarding regulations, Indonesia actually has several regulations supporting price transparency. In addition to the UUPK, there is Government Regulation No. 80 of 2019 on Electronic Commerce (PMSE), Law No. 1 of 2024 amending the Law on Information and Electronic Transactions (ITE), and the Financial Services Authority Regulation (POJK) No. 1/POJK.07/2013 governing the financial services sector.
“All these regulations explicitly stipulate that businesses must provide clear and non-misleading information. In fact, POJK requires a 30-day notice period for any changes in fees,” she said.
However, the proposal to eliminate miscellaneous fees requires careful consideration. Prof. Lilik acknowledged that this step aligns with the spirit of consumer protection. However, from a business perspective, it could pose new challenges.
“Digital platforms such as e-commerce, ride-hailing, and fintech have complex operational cost structures. To date, miscellaneous fees have been one of the pillars supporting these services. If eliminated, there is a possibility they will circumvent this by raising product prices, directing consumers to premium services, or incorporating excessive advertising,” she explained.
She added that another risk of completely eliminating hidden fees is the emergence of new forms of hidden burdens, such as unreasonable price markups, irrelevant product bundling, or hidden paid services behind free apps.
“Transparency does not always mean the complete removal of other fees. What is most important is how all cost components are clearly communicated from the start. Consumers have the right to know what they are paying for,” she said. (dr) (IAAS/FMT)
