What happened
The Federal Court has ordered Harvey Norman Holdings Ltd to pay $35 million in penalties and Latitude Finance Australia to pay $20 million in penalties - a combined $55 million - for misleading customers through a national advertising campaign.
ASIC describes this as the highest combined penalty it has obtained for misleading conduct relating to financial products and services.
The advertising campaign
The ads ran thousands of times across television, radio, and newspapers between January 2020 and August 2021. They promoted a 60-month interest-free, no deposit payment method for goods bought at Harvey Norman stores.
The court found the ads did not make clear that customers were required to take out a credit card - such as the Latitude GO Mastercard - and would be liable to pay monthly account service fees and, up to 15 March 2021, establishment fees as well.
ASIC calculated that customers who signed up from 16 March 2021, made purchases using the 60-month plan, and paid it off over the full term would have been liable to pay at least $537 in fees on top of their purchase price.
Court findings
The court found the compliance processes of both companies were wholly inadequate. Harvey Norman received the higher penalty in part because its Chairman made public statements showing disregard for the harm caused to consumers.
Corrective advertising orders
Both companies were also ordered to publish corrective advertising on their website home pages for 90 days.
Key actions
- If advertising financial products or payment methods - including buy now pay later, interest-free deals, or store credit - every fee, charge, and obligation is required to be clearly disclosed in the advertising itself, not buried in fine print.
- Review current advertising for any payment arrangements that involve a credit product such as credit cards, store accounts, or finance plans. If customers must apply for credit to use the offer, that is required to be stated clearly.
- Check the ASIC Moneysmart website for guidance on how interest-free deals work and what disclosures are required: moneysmart.gov.au.
- If a third-party finance provider supplies advertising for in-store promotions, the court found both the retailer and the finance provider equally responsible for misleading ads. Confirming in writing that supplied advertising meets ASIC's disclosure requirements is relevant to that shared responsibility.
This is a plain-English summary for information only, not legal or compliance advice. Always check the official source or consult a qualified professional.