The Federal Court has ordered retailer Harvey Norman and Latitude Finance to pay $35 million in penalties for false or misleading advertising.
The campaign promoted a 60-month interest free and no deposit payment method for goods purchased at Harvey Norman stores.
The combined penalty is the highest obtained by corporate regulator ASIC for misleading conduct and false or misleading representations relating to financial products and services.
The advertisements were published and broadcast thousands of times across Australia between January 2020 and August 2021 in newspapers, on radio and on television and would have been viewed by millions of Australians.
ASIC was concerned the advertisements masked that consumers were required to take out a credit card, such as the Latitude GO Mastercard, to purchase goods, and were liable to pay monthly account service fees and, up to March 15, 2021, also establishment fees.
Justice O'Bryan said Harvey Norman and Latitude had put sales and commercial interests above the interests of consumers and distorted the markets in which competing goods and finance were offered.
He said the compliance processes of both defendants were wholly inadequate.
Both companies have also ordered to publish corrective advertising on their website home pages for 90 days.
ASIC chair Sarah Court said the penalties sent a strong warning to the market about the importance of truthful and transparent advertising.
"Consumers were entitled to know that this offer involved more than simply paying for their purchase in 60 instalments," she said.
“The advertising encouraged consumers into an ongoing credit arrangement that carried additional costs and obligations.
"Today's outcome sends a strong message that businesses must give consumers a clear and accurate picture of the products they are promoting and the costs that come with them.”
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