Nairobi — The Competition Authority of Kenya (CAK) has fined asset financier Mogo Sh10.9 million for engaging in false and misleading representation and unconscionable conduct against its customers.
CAK says the decision follows investigations triggered by complaints from four customers who accused the company of altering loan terms, applying fluctuating foreign exchange rates, and overcharging them.
“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,” read the directive by CAK in part.
CAK has similarly directed Mogo to refund Sh344,939 to three customers as reimbursement for excess charges due to currency conversion differences and inflated interest rates.
The authority’s investigation was initiated after complaints were lodged in May 2023 where customers reported discrepancies in loan repayments and interest calculations.
According to CAK, one complainant alleged that a loan of Sh 2.1 million disbursed in Kenyan shillings was subjected to a dollar-based repayment plan, causing unpredictable payments.
Another customer, after paying for 20 months, found their outstanding balance had increased beyond expectation, a result of Mogo’s use of the dollar despite disbursing loans in shillings.
The investigation found that Mogo had violated sections of the Competition Act by making misleading representations and altering loan terms unilaterally.
While Mogo initially denied the accusations, they later agreed to settle the matter administratively, committing to pay the fine and resolve all pending and future complaints.
The regulator has since directed Mogo to ensure its employees undergo consumer compliance training to avoid a recurrence of these issues as part of compliance.
