Payday Startup Addresses Fraud Allegations, Account Restrictions
TECH DIGEST– Payday is facing accusations of fraud from its customers due to unannounced account restrictions, has responded to the allegations. Favour Ori, the CEO of the company, issued a statement addressing the issue and attributing the customers’ negative experiences to technical glitches.
Ori acknowledged that the company had detected unusual activities on its platform, leading to the imposition of restrictions on approximately 2,000 accounts. He apologized for the recent decline in service quality and assured customers that their funds remained secure. Ori emphasized Payday’s commitment to resolving all platform-related issues and reinstating customer confidence.
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In his statement, Ori clarified the necessity for account restrictions by stating, “As with any fintech, we have established protocols to monitor and suspend accounts suspected of engaging in fraudulent or prohibited activities.” He explained that restrictions were imposed when account security was compromised, suspicious activities indicated potential fraud, or regulatory guidelines and internal policies were violated. Ori stressed that account restrictions were a serious decision, initiated with careful consideration for legitimate customers’ inconveniences. The company would conduct internal investigations and collaborate with affected customers during the resolution process.
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Ori also highlighted that Payday’s internal systems had flagged activities contravening their terms of use, resulting in the temporary restriction of 2,000 accounts. He assured that the majority of affected accounts (over 60%) had been reinstated. During the restriction phase, unaffected accounts continued to transact smoothly with Payday’s virtual VISA/Verve cards and services like bill payments and currency exchange.
The company had encountered service issues with Mastercard, prompting them to sever ties with the provider. Unfortunately, this caused disruptions for customers who used Mastercard on Payday’s platform, as all card-related activities were suspended. Payday decided to discontinue its engagement with Mastercard and offer an alternative card while resolving reconciliation matters. The company was in the process of refunding outstanding card balances to affected customer wallets, with completion expected within three weeks of the statement’s release.
However, some customers remained dissatisfied with Payday’s explanation. Haydar Ahmad, an affected customer, expressed frustration at having his funds locked on the platform for more than 30 days. He criticised Payday for restricting accounts without clear justification and accused the company of scamming its customers.
Despite efforts to address customer concerns, some remained discontented, feeling that their trust had been betrayed.
