5 October 2022 - ASIC sues Latitude Finance Australia and Harvey Norman Holdings for allegedly misleading interest free advertising

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 Deputy Chair Sarah Court said, ‘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. 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 seeks declarations, pecuniary penalties, injunctions and other orders against Latitude and Harvey Norman. The date for the first case management hearing is yet to be scheduled by the Court.

ASIC’s Regulatory Guide RG 234 is for promoters of financial products, financial advice services, credit products and credit services, and publishers of advertising for these products and services. RG 234 contains good practice guidance to help promoters comply with their legal obligations not to make false or misleading statements or engage in misleading or deceptive conduct. 

Since 5 October 2021, new design and distribution obligations have applied. These obligations require issuers and distributors of financial products to help consumers obtain appropriate financial products by taking a consumer centric approach when designing and distributing their products. More information is available in ASIC Regulatory Guide RG 274.

Related Learning

Marketing and advertising financial products RG 234 short course

Design and Distribution Obligations short course