The nation's corporate regulator has won its case which alleged Harvey Norman misled consumers with an advertising campaign for interest-free finance.The Federal Court has ruled the leading Australian retailer and Latitude Finance Australia engaged in misleading conduct and made false or misleading representations with a widespread advertising campaign for a 60-month interest-free and no-deposit payment method.The advertisements were published between January 2020 and August 2021.
The nation's corporate regulator has won its case which alleged Harvey Norman misled consumers with an advertising campaign for interest-free finance. (Nine)The Australian Securities and Investments Commission (ASIC) was concerned the advertisements masked the fact consumers were required to take out a credit card, such as the Latitude GO Mastercard, to purchase goods.ASIC deputy chair Sarah Court said the regulator took this case on the belief that many consumers may have been unaware of the financial arrangements they were entering into when they bought everyday products at Harvey Norman stores."In some cases, this may have meant they paid considerably more for purchases than they expected," Court said."The financial obligations under a credit card are different to what was advertised by Harvey Norman. "A continuing credit contract can involve multiple advances of credit together with monthly account service fees and high interest rates, all of which add up for consumers."Consumers deserve to be fully informed so that they can consider their current financial position and decide if a credit card is the appropriate product for them."
The advertisements were published between January 2020 and August 2021. (Fairfax Media)9news.com.au has contacted Harvey Norman for comment.The regulator alleged during proceedings that Latitude and Harvey Norman contravened the ASIC Act by pursuing a national advertising campaign which ASIC alleged failed to adequately disclose the true scope and cost of the promoted payment method.The court found the statement of the payment method in the advertisements was presented as a complete statement when it was far from complete.Justice David Yates found that "consumers who wished to make such a purchase had to enter into a fundamentally different financial arrangement than the one promoted"."Namely, a continuing credit contract with Latitude that was linked to a credit card (the GO Mastercard), whether or not they wanted a credit card (let alone a GO Mastercard), which required them to pay an establishment fee and ongoing monthly account service fees in respect of that linked account," Yates said.ASIC will seek relief including pecuniary penalties against Latitude and Harvey Norman.
