The Australian Securities and Investments Commission (ASIC) is suing Latitude Finance Australia (Latitude) and Harvey Norman over ads promoting “no deposit” and “interest free” payment methods.
ASIC says that the ads were misleading because they did not disclose that consumers could only use the interest free payment method if they applied for and used a Latitude GO Mastercard.
ASIC also alleges that the advertisements misrepresented the true cost of using the payment method because they failed to adequately disclose establishment fees and monthly account service fees.
“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 ASIC deputy chair Sarah 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.”
ASIC says that customers who signed up for a GO Mastercard between March and August last year and purchased something at Harvey Norman and paid it off over a 60-month period would be culpable for at least $537 in fees on top of the stated purchase price.
ASIC also says that Latitude and Harvey Norman distributed and earned significant revenues from the GO Mastercard, which is available exclusively through Harvey Norman franchisees’ stores and Harvey Norman and Latitude websites.
From around July 2020, the GO Mastercard credit card was rebranded the Latitude GO Mastercard.
A spokesperson told the Sydney Morning Herald that Harvey Norman intends to defend the proceedings but was unable to comment further at this stage. Latitude Financial said in a statement that it took the allegations “very seriously” and had worked with ASIC during the investigation.
Harvey Norman is no stranger to questionable deals for customers. In 2015, customers in New Zealand thought that they had snagged a dirt-cheap deal on the company’s online store after launching “New Zealand’s Biggest Retail Sale.” One customer thought she had paid $159 for a lounge suite but was charged $1,359 by her bank.
However, the almost 330 customers who snagged affordable furniture were later emailed claiming the prices they paid were the result of a “genuine error” and offered them a refund and a $100 voucher.
