Micro-lender Mogo Auto Limited has asked the High Court to dismiss a proposed class action lawsuit filed by three borrowers, arguing that the case is legally defective, frivolous, and an abuse of the court process.
In detailed grounds of opposition filed in court, Mogo contends that the suit—which accuses the company of predatory lending practices—fails to meet the strict legal threshold required for instituting a representative or class action under Kenyan law.
Mogo Challenges Legal Basis of Class Action
According to Mogo, the application by the three borrowers is misconceived, incompetent, and bad in law, as it does not comply with Order 1 Rule 8 of the Civil Procedure Rules, 2010, which governs representative suits.
The lender argues that the borrowers have failed to demonstrate the existence of a common interest, common grievance, or common relief between themselves and the purported class members they seek to represent.
“The applicants have not shown that there exists a shared factual or legal foundation capable of sustaining a representative action,” Mogo states in its court filings.
Borrowers Not Properly Identified, Court Told
Mogo further submits that the alleged class members have not been identified or described with reasonable certainty, rendering the proposed representation vague, impracticable, and incapable of judicial management.
The firm argues that without a clearly defined class, the court would be unable to determine who is bound by the proceedings or the outcome of the case.
“The purported class is amorphous, uncertain, and lacks the precision required to justify a representative action,” the lender argues.
Allegations of Abuse of Court Process
In its submissions, Mogo accuses the borrowers of abusing the judicial process by attempting to sensationalise the dispute and attract undue public attention to the matter.
The company claims the application is designed to unfairly prejudice its commercial reputation and undermine its standing in the financial services market.
“The attempt to convert the present suit into a class action is intended to circumvent procedural safeguards, multiply claims against the defendant, and open the floodgates to unverified and unrelated claims,” Mogo argues.
Individual Contracts Cannot Be Litigated Collectively
Mogo also maintains that the proposed class action raises individualised contractual and factual issues, which cannot be resolved through a single proceeding or a common remedy.
The lender argues that each borrower entered into a separate loan agreement, with different repayment terms, interest calculations, insurance arrangements, and enforcement actions.
As such, Mogo insists that the issues raised are unsuitable for collective determination, and must instead be litigated on a case-by-case basis.
Borrowers Accuse Mogo of Predatory Lending
On their part, the three borrowers have accused Mogo Auto Limited of engaging in systematic predatory lending, particularly in the financing of motor vehicles and motorbikes.
In their petition before the High Court, the borrowers allege that Mogo’s loan documentation and disclosure methods are misleading and deceptive, and fail to clearly communicate the true cost of credit.
They claim the company does not adequately disclose:
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The actual cost of borrowing
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The effects of foreign-currency indexing
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The full financial obligations imposed on borrowers
According to the petitioners, these key elements are uniformly concealed from consumers in violation of principles of transparency, consumer protection, and commercial fairness.
Claims of Hidden Charges and Aggressive Recoveries
The borrowers further allege that after being lured with promises of affordable financing, consumers are later subjected to:
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Hidden charges
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Inflated insurance premiums
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Aggressive recovery tactics and repossession threats
They argue that this business model disproportionately targets vulnerable consumers, creating a cycle of indebtedness and financial distress.
Basis for Class Action Application
The borrowers argue that all consumers who obtained motor vehicle or asset financing from Mogo Auto Limited under its standard-form loan agreements were subjected to uniform lending practices.
They claim that the loan terms, interest computation methods, insurance arrangements, and recovery mechanisms are materially similar across all borrowers, making the dispute suitable for class-wide adjudication.
“The reliefs sought are declaratory, injunctive, and restitutionary in nature, and their determination will apply uniformly to all borrowers subjected to the same contract structure and business practices,” the borrowers state.
Request for Public Notice to Other Borrowers
Through their lawyer Simon Mburu, the borrowers have asked the court to authorize the issuance of public notices in newspapers and digital platforms to invite other affected borrowers to join the case.
They propose that upon publication of the notice and the lapse of a court-directed period, all borrowers who were subjected to the same lending and recovery practices be deemed represented in the proceedings and bound by the final outcome.
Court to Determine Threshold Issue
The High Court is now expected to determine whether the suit meets the legal threshold for a representative action, a decision that could have far-reaching implications for consumer lending disputes and the regulation of asset financing firms in Kenya.