ASIC has announced that it has issued legal action against Latitude Finance Australia (Latitude) and Harvey Norman Holdings Ltd (Harvey Norman) over the promotion, as part of a national advertising campaign, of a “60 months interest free” payment method for buying home and electrical products, which it claims was misleading as to the true scope and cost of that payment method.
ASIC alleges that from January 2020 to August 2021, advertisements promoting ‘no deposit’, ‘interest free’ payment methods over a specified term for purchases at Harvey Norman 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.
From around July 2020, the GO Mastercard credit card was rebranded the Latitude GO Mastercard.
The co-branded credit card was available exclusively through Harvey Norman franchisees’ stores and the defendants’ websites.
If a consumer used the card to purchase Harvey Norman Goods from a Franchisee on interest free terms, then the consumer was not liable to pay interest to Latitude for the agreed term, but incurred interest charges thereafter. The consumer was also required to pay an establishment fee and a monthly account service fee.
ASIC says that consumers who signed up to the GO Mastercard on or after 16 March 2021 and before 11 August 2021, and made a purchase at Harvey Norman using the 60 month interest free payment method and paid off their purchase over 60 months, would be liable to pay at least $537 in fees, on top of their purchase amount.
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Author: David Jacobson
Principal, Bright Corporate Law
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About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.
