Harvey Norman to be sued over ‘misleading’ interest-free deals

ASIC sues Aussie retailer Harvey Norman over ‘hidden’ costs. Image Bigstock

Retail giant Harvey Norman, and credit provider Latitude, are being sued by the Australian Securities and Investments Commission (ASIC) for allegedly misleading consumers on interest-free finance deals. 

The corporate regulator has launched legal action against the retailer and the finance company for “misleading and deceptive” conduct over advertisements that promoted “no deposit” and “interest-free” payments because the retailer did not disclose that consumers could only use the interest-free payment method if they applied for and used a Latitude Go Mastercard.

In addition, ASIC said the retailer failed to disclose the hidden costs of the agreement, namely the establishment fee of $25 and monthly service fees of $5.95.

Harvey Norman sued by ASIC over hidden costs

“ASIC is concerned the advertising did not provide consumers with the full picture, that they could only use the interest-free payment method by applying for and using certain Latitude credit cards,” said Sarah Court, deputy chair at ASIC.

“These credit cards, ASIC alleges, attracted substantial fees over the 60-month payment term, and exposed consumers to the risks of incurring further debts and charges, as well as potentially affecting their credit rating.”

The corporate regulator has alleged that consumers who signed up for the promotion were liable for $537 in charges even if they paid off their purchase over the full interest-free period.

“Consumers have a right to make informed choices,” said Court. 

“Credit providers and retail partners such as Latitude and Harvey Norman should ensure that their advertising discloses all important information about payment methods and fees.”

The date for the first case management hearing has yet to be scheduled by the court. 

This article was first published on sibling website Inside Retail.

The electronics and furniture retailer reported the impact of Covid had dulled its half year profits in early 2022. The profits of the Australian arm of the business were estimated at $292.95 million.