Harvey Norman and Latitude Finance have been found guilty by the Federal Court for misleading consumers through an advertising campaign for a 60-month interest-free and no deposit payment method. The Australian Securities and Investments Commission (ASIC) expressed concern that the advertisements masked the fact that consumers were required to take out a credit card, such as the Latitude GO Mastercard, to purchase goods. The advertisements were published between January 2020 and August 2021.

ASIC alleged that Latitude and Harvey Norman contravened the ASIC Act by failing to adequately disclose the true scope and cost of the promoted payment method. Justice Yates found that consumers who wished to make such a purchase had to enter into a fundamentally different financial arrangement than the one promoted.

"ASIC took this case because we believed 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," said ASIC Deputy Chair Sarah Court. "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."

ASIC will seek relief including pecuniary penalties against Latitude and Harvey Norman. Harvey Norman Holdings confirmed it had applied to the Federal Court of Australia for leave to appeal against the declarations made by the Honourable Justice Yates.