The Federal Court has ruled that Harvey Norman, along with Latitude Finance Australia, made false and misleading financial claims in a national advertising campaign.
The campaign, which ran from January 2020 to August 2021, was for a 60-month interest-free and no-deposit payment method. Customers were required to take out a credit card, such as the Latitude Go Mastercard, to purchase goods.
According to the Australian Securities and Investments Commission (ASIC), many consumers may have been unaware of the financial arrangements they entered when buying products at Harvey Norman stores.
“The financial obligations under a credit card are different to what was advertised by Harvey Norman,” said Asic deputy chair Sarah Court.
“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.”
The court found the advertisements’ statement of the payment method was presented as a complete statement when it was far from complete.
Consumers had to enter into a fundamentally different financial arrangement than the one promoted, as they needed to use a credit card, which comes with an establishment fee and monthly account service fees, said Justice Yates.
ASIC intends to seek relief, including pecuniary penalties against Latitude and Harvey Norman.
In a stock exchange filing, Harvey Norman said it was aware of the court finding and would consider the judgment before determining whether to appeal the verdict.
This article was first published on sibling website Inside Retail.
