The Federal Court has imposed substantial penalties on Harvey Norman Holdings Ltd and Latitude Finance Australia for misleading conduct and false or misleading representations in a national advertising campaign for a 60‑month interest free and no deposit payment method for goods purchased at Harvey Norman stores.
Harvey Norman was ordered to pay $35 million in penalties, while Latitude Finance Australia was ordered to pay $20 million. According to the Australian Securities and Investments Commission (ASIC), the combined $55 million penalty is the highest obtained by the regulator for misleading conduct and false or misleading representations relating to financial products and services.
The advertising campaign promoted a 60‑month interest free and no deposit payment method and ran between January 2020 and August 2021. The advertisements appeared in newspapers, on radio and on television and were published and broadcast thousands of times across Australia, meaning they would have been viewed by millions of Australians.
ASIC was concerned that the advertisements masked the requirement for consumers to take out a credit card, such as the Latitude GO Mastercard, in order to purchase goods under the promoted payment method. Consumers were also liable to pay monthly account service fees and, up to 15 March 2021, establishment fees, which were not made clear in the advertising.
Regulatory and judicial findings
ASIC Chair Sarah Court said the substantial penalties and the corrective advertising orders imposed on Harvey Norman and Latitude represent a significant outcome for consumers. She stated that the decision sends a strong warning to the market about the importance of truthful and transparent advertising, particularly in relation to financial products and services.
Justice O'Bryan found that Harvey Norman and Latitude put sales and their commercial interests above the interests of consumers. The Court also found that their conduct distorted the markets in which competing goods and finance are offered, underscoring the broader impact of misleading advertising on competition and consumer decision-making.
Corrective advertising orders
In addition to the financial penalties, the Court ordered both Harvey Norman and Latitude to publish immediately visible corrective advertising on their website home pages for 90 days. The corrective notices are intended to address the misleading impressions created by the original advertising campaign and to inform consumers about the true nature of the payment method that was promoted.
The outcome highlights the Court's and ASIC's focus on ensuring that advertising for financial products and payment methods clearly discloses key conditions and fees, and does not obscure material information that may affect consumers' understanding of the offer.
