Fintech startup, Payday, has reacted to the allegations of fraud levelled against the company by its customers over restrictions placed on their accounts without any notice.
The company’s CEO, Favour Ori, in a statement clarifying the issue, blamed the poor experience of its customers on technical hitches.
In addition, he said the company had also suspected unusual activities on its platform, which led to placing restrictions on about 2,000 accounts.
While apologizing to the customers for the poor quality of service on the platform in recent times, Ori said the company was committed to resolving all issues with the Payday platform and restoring the customers’ trust.
He also assured the customers that their funds are safe as the company continues to work to fully restore all affected services.
Need for accounts restrictions
While noting that the business thrives on the trust of its customers, the Payday CEO said:
- “Like any fintech, we have set up measures to constantly monitor and lock out customers who we suspect are involved in fraudulent or prohibited activities. Based on the above, and as required by regulation, there are a number of reasons why we might need to place restrictions on a customer’s account: If we notice that the security of your account has been compromised; If we notice unusual activity that may be linked to fraud; and If your activities violate directives of key regulatory bodies or our internal policies.
- “Restricting an account is not a decision that we take lightly, and we handle it with utmost attention and consideration. This is because we understand how inconvenient it is for legitimate customers to be unable to access their funds.
- “When we restrict an account, we immediately begin investigations internally. We also engage affected customers via email, while working with the compliance team to get to the bottom of the issue. In some cases, account restrictions might affect innocent people but after due diligence such accounts are unlocked and the customers may continue to transact freely.”
Restriction reversed on some accounts
Ori added that the company’s internal systems flagged activities that went against its terms of use. This, he said, led to the temporary restriction of about 2000 accounts.
- “Even though this number reflects a small fraction of our customer base, the team responded proactively towards the resolution of the issue, and as of today, restrictions have been reversed on over 60% of the affected accounts.
- “It is important to note, however, that during this phase, all unaffected accounts have continued to carry out transactions smoothly with our virtual VISA/Verve cards as well as services such as bills payments, currency exchange and so on.”
Issues with Mastercard
The company said it also discontinued its engagement with Mastercard because it was having issues with its service. This also created challenges for customers using Mastercard on the Payday platforms as all activities on their cards were halted.
- “As a follow-up to our previous communication with respect to providing a better experience with the Mastercard service, we discontinued engagements with our previous providers and provided an alternative card pending the conclusion of ongoing reconciliation efforts.
- “To this end, we are defunding the existing cards and crediting the outstanding card balances to the affected customer wallets. The entire process should be completed within three weeks from the release of this statement,” the company stated.
Customers not satisfied
The explanation did, however, not sit well with many of the customers whose funds have been trapped on the platform for more than 30 days. Many, via media posts, are insisting that they have been scammed by the fintech company.
Reacting to the company’s statement on X, one of the affected customers, Haydar Ahmad, angrily said:
- You restrict our accounts for 30 days, and you have the audacity to even say something? What is our offence? Making an exchange when we see a favourable rate in your platform? When does that become an offence? Why did you avail it?
- You held my money for more than 30 days now, my hard-earned funds, just because I trust you and deposited money in your platform? I feel so much disappointed and discouraged.”
You restrict our accounts for 30days, and you have the audacity to even say something?
What is our offense? Making an exchange when we see favorable rate in your platform? When does that become offence? Why did you avail it ?
You held my money for more than 30days now, my…
— Haydar ahmad (@haydar_ahmerd) August 21, 2023
