Heavyweight Australian retailer Harvey Norman and its associated credit broker Latitude Financial will appeal against an Australian Federal Court ruling that found they misled customers into taking out credit cards as part of an interest-free payment plan.
Misleading conduct alleged
The ruling, handed down on October 18, determined that the companies engaged in misleading conduct through an advertising campaign promoting “60 months interest-free” payments on high-ticket items.
This campaign ran across TV, radio and print media between January 2020 and August 2021.
The case, brought by the Australian Securities and Investments Commission (ASIC), centred on the misleading nature of the advertisements.
The court found that consumers were led to believe they were signing up for a straightforward interest-free payment plan with Harvey Norman.
In reality, the arrangement required customers to take out a credit card, such as the Latitude GO Mastercard, which involved additional fees, including establishment and ongoing monthly account service fees.
Consumers tied to debt
Justice David Yates ruled that the payment plan advertised was far from the complete financial arrangement consumers were ultimately required to enter.
He noted that customers had to agree to a continuing credit contract tied to a credit card, regardless of whether they wanted one.
ASIC argued that the misleading advertising may have caused customers to pay significantly more than expected for their purchases at the retailer.
The regulator sought relief, including financial penalties, against Harvey Norman and Latitude Financial.
Both companies announced their intention to appeal on Tuesday, the final day to file an application for leave to appeal.
A hearing to determine any penalties arising from the case is expected to be scheduled after May 19, 2025.