MOGUL lender accused of concealing true cost of credit, imposing hidden charges on borrowers
NAIROBI — Microlender Mogo Auto Limited has been hit with a class action lawsuit over what consumers describe as predatory lending practices and unfair loan recovery methods, marking one of the first collective consumer suits targeting a digital asset financier in Kenya.
In a petition filed before the High Court, three borrowers — Caroline Nderitu, Wilson Gikonyo, and Joseph Wangari accuse Mogo Auto of using misleading loan documents and deceptive disclosure methods that conceal the true cost of credit.
They allege the company fails to inform borrowers about the impact of foreign-currency indexing, hidden insurance charges, and other financial obligations that inflate the cost of borrowing.
“The company’s conduct amounts to systematic exploitation of vulnerable consumers under the guise of affordable financing,” the borrowers state in court documents.
Justice Dr. Freda Mugambi has directed the three petitioners to serve Mogo Auto with court papers ahead of a hearing scheduled for December.
The trio is seeking permission to represent all other customers who obtained car or motorbike financing under the company’s standard loan agreements.
Through their lawyer Simon Mburu, the petitioners are asking the court to authorize the publication of a public notice in newspapers and on digital platforms inviting other affected customers to join the case.
“Upon due publication of the said notice, all borrowers subjected to the same uniform lending and recovery practices may be deemed represented in and bound by the outcome of these proceedings,” the application reads.
The borrowers claim Mogo Auto’s business model includes hidden charges, inflated insurance premiums, and aggressive repossession tactics, which they say amount to an exploitative and unfair credit system.
They argue that all Mogo customers face similar treatment under identical contract structures.
“The reliefs sought are declaratory, injunctive, and restitutionary in nature,” the borrowers said. “Their determination will apply uniformly to all borrowers who were subjected to the same contract structure and business practices.”
According to court filings, the three borrowers entered into identical loan agreements that allegedly mirror those of thousands of other clients across Kenya.
They argue that while individual loan amounts and repayment periods may differ, the core issue is the legality and fairness of Mogo’s standardized lending model, not personal borrower circumstances.
The petition seeks court declarations that Mogo’s lending and recovery practices are unlawful and unfair, an injunction to stop the company from enforcing disputed terms, and restitution for borrowers affected by the alleged misconduct.
Mogo Auto, which operates as part of an international microfinance group, has yet to respond publicly to the allegations. The case is expected to test the boundaries of consumer protection law and fair lending standards in Kenya’s fast-growing asset financing market.
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