The Competition Authority of Kenya (CAK) has imposed a KSh10.9 million penalty on Mogo Auto Limited for engaging in false and misleading representations and unconscionable conduct against its customers.
According to CAK, Mogo charged customers excessive amounts due to currency fluctuations and incorrect interest calculations. As a result, Mogo’s actions violated Kenyan consumer protection laws besides failing to disclose key terms and conditions of loan agreements.
“The complainant accused Mogo of adjusting the terms flat rate to the reducing balance basis, and that the interest payable was calculated in USD, despite the facility being disbursed in KES,” CAK said in a statement.
Penalties and Remedies
- Fine: Mogo was ordered to pay a KSh10.9 million penalty.
- Refunds: Three customers received refunds totalling KSh344,939 for excess charges.
- Loan adjustments: The first complainant’s outstanding loan amount was reduced and payable in instalments.
- Consumer compliance training: Mogo and its employees must undergo training to improve consumer practices.
“Upon analyzing the evidentiary information from the complainants and the accused, the Authority concluded that Mogo had violated the Act, specifically clauses prohibiting false or misleading representations, and engaging in unconscionable conduct during issuance and administration of loan products to the complainants,” CAK noted.
Mogo has agreed to settle the complaints and resolve any future issues promptly.
In addition, the company will undergo consumer compliance training to ensure future adherence to regulations.
