Asset financier Moto Auto Limited has been ordered to pay a pecuniary penalty of Ksh10.9 million by the Competition Authority of Kenya for engaging in false and misleading representation and dishonest conduct against its customers.
In a statement on Friday, CAK noted Mogo violated the Competition Act CAP 504 (the Act), which has provisions aimed at promoting consumer welfare.
Furthermore, Mogo has been ordered to refund Ksh344,939 to three of their loan customers. The refund is the sum of the excess amount resulting from the excess charges in repayment of loans and the difference in the dollar exchange rate applied during the loan issuance,” the statement read.
CAK has also directed Mogo to refrain from misrepresenting facts and engaging in dishonest conduct when dealing with its customers and to resolve pending complaints before CAK.
Investigations into Mogo’s activities were initiated by four customers who lodged complaints with CAK in 2023 and 2023. One of the complainants accused Mogo of changing the loan terms from a flat rate to reducing the balance basis and calculating the interest payable in USD.
“This adjustment, they claimed, caused the payment of unpredictable amounts due to foreign exchange fluctuations,” CAK said.
The second complainant claimed the asset financier produced a loan balance of Ksh392,000 even after the customer had cleared the loan in full. Also, Mogo computed the amount payable in USD rather than Kenyan shilling.
The third complainant reported that the asset financier explained that the dollar tabulation was for record-keeping but went ahead to calculate loan installments in USD. Similarly, the fourth complainant asserted that they serviced their loan in USD, though it was disbursed in KES.
The second complainant, third complainant, and fourth complaint will be refunded Ksh108,745, Ksh80,915, and Ksh155,279, respectively.
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