Kenyans, especially the youth, have been urged to be more vigilant when buying products, whether online or in physical stores, and when seeking financial services, to avoid falling victim to exploitation.

With the rise of digital platforms, many consumers are buying products without fully understanding the ingredients, manufacturers or terms and conditions, putting them at risk of being swindled by unscrupulous vendors.

The same is happening with digital loans, where borrowers often fail to read the fine print, leading to high-interest rates and repayment amounts much higher than what they originally agreed upon. Boniface Kamiti, the Manager of Consumer Protection at the Competition Authority of Kenya (CAK), highlighted that digital lending platforms have become a hotspot for exploitation.

Young people, who often turn to these platforms for quick cash to buy essentials or cover emergencies, are particularly affected. “There are these loans we get from the digital platforms that have terms and conditions most consumers don’t read,” Kamiti said.

He noted that while some of these conditions may be in complicated legal language, many companies are now trying to make key information clearer and more accessible to their customers.

According to a report by CAK, the number of cases related to digital lending has been on the rise, with 63 complaints received in the financial year ending June 2024, compared to just 16 the previous year.

The report pointed out that as more digital lenders pop up, many consumers are facing financial hardship because of high-interest rates, lack of clear terms, and aggressive loan recovery tactics.

Some borrowers even reported harassment from recovery agents, with one case involving a woman who was pursued by loan recovery agents even after switching her phone number to avoid threatening messages.

This kind of harassment not only breaches privacy rights but also highlights the importance of reading the terms and conditions before signing up for any service. Had the woman known her rights, she could have demanded compensation for the stress and privacy violations. Unfortunately, many youths remain unaware of their consumer rights and fail to take action when their privacy is compromised. Moreover, some financial institutions have been accused of scams, where they trick borrowers into handing over sensitive information like passwords. These actions are criminal, and CAK has partnered with the Directorate of Criminal Investigations (DCI) to tackle such fraud.

Kamiti also emphasised the need for consumers to carefully check price tags in supermarkets and ensure they understand the full details of a product.

He pointed out that some stores charge customers extra without their knowledge, leading to higher profit margins. Youths often ignore small discrepancies like this, but it can add up over time, and being aware could help prevent overcharging.

When making complaints, it’s important to have written evidence rather than relying on phone calls, which companies can easily dismiss. CAK has handled cases where consumers lacked proof, making it difficult for the authority to take action. Kamiti stressed that having documentation is key to ensuring fairness in consumer protection.

The report also highlighted issues with logbook loans, where car owners are sometimes charged excessively or misdirected to third-party services unrelated to the loan.

One case involved a consumer who could not sell his car after paying off a logbook loan because a bank refused to release his logbook due to a late repayment on another loan. This case was eventually withdrawn after an amicable resolution was reached.