By Sam Alfan.
Micro lender Mogo Auto Ltd has urged the High Court to dismiss a class action brought against the firm by two borrowers over alleged predatory lending.
The lender termed the suit as frivolous, vexatious, and without merit, and ought to be dismissed.
According to Mogo, the application by three borrowers is misconceived, incompetent, and bad in law as it fails to satisfy the mandatory requirements for instituting or maintaining a representative suit under Order 1 Rule 8 of the Civil Procedure Rules, 2010.
“Three borrowers have not demonstrated that there exists a common interest, common grievance, or common relief sought as between them and the alleged members they purport to represent,” claims Mogo.
The company argued that the alleged members have not been identified or described with reasonable certainty, rendering the proposed representation uncertain, vague, and Impracticable.
The company claim that the application is an abuse of the process of the court and is designed to sensationalize the matter, attract undue publicity, and unfairly prejudice Mogo’s reputation and commercial standing.
“The Plaintiffs attempt to convert the present suit into a representative action is intended to circumvent procedural safeguards, multiply claims against the Defendant, and open the floodgates to unverified and unconnected claims,” claims the company in the grounds of opposition.
It is Mogo’s arguments that the proposed representative suit raises individualized contractual and factual issues that are incapable of being determined through a single proceeding or common relief.
In a petition before the High Court, three borrowers claimed that Mogo’s loan documentation and disclosure methods were misleading and deceptive.
The borrowers said the company, which finances acquisition of cars and motorbikes fail to properly inform borrowers of the true cost of credit, the effect of foreign-currency indexing, and the real financial obligations undertaken, all of which are uniformly concealed from consumers in violation of basic commercial fairness.
The three moved to court and sought orders to institute a class action suit on their own behalf and on behalf of all other borrowers.
They argue Mogo’s conduct constitutes a pattern of predatory lending, targeting vulnerable consumers with misleading promises of affordable financing.
However, the borrowers are later subjected to hidden charges, inflated insurance premiums, and repossession threats, all of which amount to an exploitative business model affecting all class members equally.
It is their argument that consumers who obtained motor vehicle or asset financing from Mogo auto Limited, under its standard-form loan agreements and uniform lending model, are subjected to similar loan terms, interest computations, recovery methods, and insurance arrangements.
“The reliefs sought are declaratory, injunctive, and restitution in nature and their determination will apply uniformly to all borrowers who were subjected to the same contract structure and business practices,” the borrowers said.
Through lawyer Simon Mburu, the borrowers want the court to invite other borrowers to join the case in a newspaper advertisement and digital platforms.
“Upon due publication of the said notice and the lapse of the period specified by the Court, all borrowers and consumers of Mogo’s credit facilities who were subjected to the same uniform lending and recovery practices may, as the Court shall direct, be deemed represented in and bound by the outcome of these proceedings,” the trio said.
