The Competition Authority of Kenya (CAK) has levied a Sh10.9 million fine against Mogo, a local asset financier, for engaging in misleading representation and predatory practices towards its customers.

This decision follows a thorough investigation prompted by multiple complaints accusing the company of altering loan terms and applying fluctuating foreign exchange rates without customer consent.

The complaints, which triggered the probe, came from four clients who reported unjust overcharges and discrepancies in their loan repayments.

Among the grievances, one customer disclosed that a loan amount of Sh2.1 million, disbursed in Kenyan shillings, was subject to dollar-based repayments, creating irregular payment schedules.

Another customer, who had consistently paid instalments for 20 months, discovered that their outstanding balance had unexpectedly risen, a result of Mogo’s questionable application of the US dollar in loan repayments, despite the loans being issued in local currency.

Read More

  1. CAK approval of Access Bank buyout of NBK guarantees retention of workforce
  2. Monarch Insurance gets new majority owners in CAK-approved acquisition
  3. Insurance regulator to crack down on advocates withholding compensation

CAK's investigation determined that Mogo had violated key sections of the Competition Act by misrepresenting loan terms and unfairly adjusting agreements without notifying borrowers.

In its findings, the regulator stated that Mogo had employed "unconscionable conduct" and ordered the financier to cease such practices.

"Mogo has also been directed to; refrain from misrepresenting facts and engaging in unconscionable conduct when dealing with its clients, amicably resolve all pending complaints before the Authority, and resolve future complaints expeditiously,” part of the CAK’s statement read.

In addition to the fine, Mogo has been directed to refund Sh344,939 to three affected customers as compensation for excessive charges resulting from currency conversion and inflated interest rates.

The investigation, initiated in May 2023, uncovered significant discrepancies in the company’s dealings, prompting CAK to act swiftly in safeguarding consumer rights.

While Mogo initially contested the allegations, the company eventually agreed to settle the matter administratively, committing to comply with the fine and resolve all outstanding complaints.

As part of the resolution, Mogo is also required to provide consumer compliance training for its staff, ensuring adherence to ethical standards and preventing future violations.