Background
From 1 January 2020 to 11 August 2021, Latitude Finance Australia and Harvey Norman Holdings conducted a nationwide campaign advertising the purchase of goods from Harvey Norman, Domayne and Joyce Mayne stores through 60 equal monthly payments on “no deposit” and “no interest” terms. The advertisements appeared in newspapers and on radio and television, but did not disclose that consumers had to enter into a continuing credit contract linked to a GO Mastercard or that ongoing monthly account-service fees applied. A $25 establishment fee also applied from 1 January 2020 through 15 March 2021.
Following a contested liability trial, the Federal Court found that both companies had engaged in misleading conduct, made false or misleading representations and engaged in conduct liable to mislead the public, contrary to the Australian Securities and Investments Commission Act 2001 (Cth). The Full Court dismissed the defendants’ appeal in 2025. Because the original trial judge had retired, O’Bryan J determined the remaining questions of penalties and other relief.
The Court’s Holding
O’Bryan J imposed an aggregate pecuniary penalty of $35 million on Harvey Norman and $20 million on Latitude. The Court treated the advertisements as a single course of conduct for penalty purposes and regarded both defendants as equally responsible for the misleading campaign. Their compliance procedures during the relevant period were wholly inadequate, but the higher penalty for Harvey Norman reflected its larger size, its failure to provide satisfactory evidence of improved compliance processes and its lower level of contrition. Latitude, by contrast, presented evidence of compliance improvements and offered an apology through its general counsel.
The Court declined ASIC’s request for five-year injunctions. The advertisements had ceased soon after ASIC raised concerns, similar misconduct had not been shown to have recurred, and existing statutory sanctions were sufficient to deter repetition. The Court instead ordered targeted adverse-publicity notices: Latitude must publish the notice on its website for at least 90 days, while Harvey Norman must use all reasonable endeavours to cause the notice to be published for that period on the third-party-operated harveynorman.com.au website. ASIC may seek further orders if the Harvey Norman notice is not published as required. The defendants were also ordered to pay ASIC’s costs in equal shares, subject to an earlier costs order concerning an interlocutory application.
Key Takeaways
- Advertising “interest free” instalment plans can be misleading when it omits a required linked credit-card contract and account fees that materially affect the offer.
- Large companies require effective legal-compliance processes for consumer advertising; inadequate systems can materially increase the penalty needed for deterrence.
- Evidence of improved compliance and genuine contrition may justify different penalties for defendants who were otherwise equally responsible for the same conduct.
Why It Matters
The decision shows that courts may impose substantial penalties where a long-running, nationwide advertising campaign presents only part of the true cost and structure of consumer finance. The Court emphasized that such “half-truths” can harm consumers and distort competition even where the contraventions were not deliberate.
It also illustrates the tailored nature of ancillary relief. Despite refusing injunctions and broad mainstream-media notices, the Court required website publicity aimed at consumers most likely to encounter the defendants’ retail and credit services.