Microlender Mogo Auto Ltd is facing a class action lawsuit over alleged predatory lending practices, deceptive loan documentation, and unfair loan recovery procedures.
In a petition filed before the High Court, three Kenyan borrowers accused Mogo Auto of misleading consumers with deceptive credit terms and unfair recovery tactics that exploit vulnerable borrowers across the country.
Borrowers Allege Deceptive Loan Terms
The petitioners — Caroline Nderitu, Wilson Gikonyo, and Joseph Wangari — argue that Mogo’s loan agreements are misleading and non-transparent, especially regarding the true cost of credit and the impact of foreign-currency indexing.
According to the court documents, borrowers are often unaware of hidden charges, inflated insurance premiums, and aggressive repossession tactics, which they say amount to exploitative lending practices.
“The company fails to properly inform borrowers of the true cost of credit, the effect of foreign-currency indexing, and the real financial obligations undertaken,” reads part of the petition.
High Court Sets December Hearing Date
Justice Dr. Freda Mugambi directed the three borrowers to serve Mogo Auto Ltd with court papers ahead of a hearing set for December 2025.
The trio has asked the court to allow them to sue on behalf of all affected borrowers, in what could become one of the largest consumer protection cases in Kenya’s financial sector.
Their lawyer, Simon Mburu, said they intend to publish a public notice in newspapers and digital platforms, inviting other affected borrowers to join the case.
Claims of a Predatory Lending Pattern
The borrowers describe Mogo’s conduct as a pattern of predatory lending that targets vulnerable consumers under the guise of affordable credit.
While Mogo advertises accessible vehicle and motorbike financing, borrowers allege that the reality involves high-interest rates, hidden costs, and rapid repossession of assets when payments are delayed.
They argue that Mogo’s standardized loan agreements create a uniform set of terms and risks that apply to all clients equally — supporting their claim for a representative class action.
What Borrowers Are Seeking
The petition seeks declaratory, injunctive, and restitutional orders. The borrowers want the High Court to declare Mogo’s practices unfair, unlawful, and unconstitutional, and to compel the company to refund affected borrowers.
“The reliefs sought will apply uniformly to all borrowers who were subjected to the same contract structure and business practices,” the petition states.
Legal Context and Broader Impact
This case comes amid growing public scrutiny of digital lenders and microlenders in Kenya, many of whom have faced accusations of exploitative interest rates and poor consumer protection.
Legal experts say the outcome of the Mogo Auto case could set a precedent for how courts handle collective consumer actions in the financial sector — particularly concerning hidden credit costs and repossession practices.