Harvey Norman Is Being Sued Over Its “No Deposit” And “Interest-Free” Promotions
"ASIC is concerned the advertising did not provide consumers with the full picture."
Tech retail giant Harvey Norman is being sued for allegedly misleading customers about “no deposit” and “interest-free” payment options.
The Australian Securities and Investments Commission (ASIC) alleges that Harvey Norman failed to disclose to customers that they had to sign up for a Latitude GO Mastercard — a fully functioning credit card — to get the no deposit, interest-free payment option.
According to the complaint lodged in the Federal Court, advertisements did not mention various establishment and service fees, despite customers having to pay a minimum of $537 in hidden costs.
Latitude Financial Australia, the company that owns the GO Mastercard, has also been named as a defendant in the lawsuit. The allegations relate to advertisements that ran between January 1, 2020 and August 11, 2021 specifically; promoting a 60-month interest-free offer.
In a statement released on Wednesday, ASIC deputy chair Sarah Court said the financial regulator is “concerned” by the lack of clarity in the ads.
“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 Court.
“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.”
According to court documents, the disclaimers that clarified the additional fees and charges were not “clearly and prominently corrected by any qualifying statements elsewhere in the advertisements”.
“Interest-free” promotions using credit cards are common in retail, particularly in tech and home appliances. ASIC is seeking declarations, pecuniary penalties, injunctions and other orders against both parties, according to the complaint.
While the date for the first hearing is yet to be set, Latitude has responded to the allegations stressing it has “worked cooperatively with ASIC” during the investigation.
“Latitude is now reviewing Asic’s claim and will not be commenting further at this stage given the matter is before the courts,” a statement read.
Junkee has reached out to Harvey Norman for comment.