The Australian Securities and Investments Commission (ASIC) has commenced civil proceedings against Latitude Finance Australia and Harvey Norman Holdings Ltd for allegedly misleading consumers through advertising for “interest free” payment methods.
The legal action to be heard before the Federal Court concerns allegations that Harvey Norman misled consumers by not disclosing in advertisements promoting “no deposit” and “interest free” payment methods that these methods were only available if using a Latitude GO Mastercard.
The corporate watchdog said in its announcement that consumers were also not alerted to the “true cost” of these payment methods, as the retailer and financial provider “failed to adequately disclose establishment fees and monthly account services”.
While the advertisements ran between January 2020 and August 2021, ASIC said customers who applied for and used the GO Mastercard between 16 March 2021 and 11 August 2021, made a purchase using the 60-month interest free payment method and paid off their purchase over those 60 months, were then hit with at least $537 in fees in addition to their purchase amount.
“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,” ASIC Deputy Chair, Sarah Court, said.
“These credit cards, ASIC alleges, attracted substantial fees over the course of 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.”
“Consumers have a right to make informed choices. Credit providers and retail partners such as Latitude and Harvey Norman should ensure that their advertising clearly discloses all important information about payment methods and any fees.”
Latitude also said in an announcement on Wednesday morning that they have acknowledged ASIC’s filing of civil proceedings and its investigation of “historic advertisements” but won’t make any further comments.
ASIC said it is seeking declarations, pecuniary penalties and injunctions against Latitude and Harvey Norman.