Harvey Norman will soon know the penalty it must pay for its misleading and deceptive “60 months interest free” campaign that reaped the company tens of millions in ill-gotten gains over 20 months to March 2021.
A penalty adjudication hearing in the Federal Court in Melbourne has just concluded with the company’s founder Gerry Harvey ruing his “intemperate” public commentary about the case that “the whole legal system is completely f***ed in Australia.”.
The company urged Justice Michael O’Bryan not to impose less than $24 million penalties —less than half of the $50 million sought by ASIC.
By way of background, the company had bombarded Australian consumers with a seductive promise: “60 months interest free. No deposit. 60 equal monthly payments”.
It appeared in bright red banners in 168 newspapers, on 143 radio stations, and across Australian television screens more than 900,000 times.
It looked like a simple way to spread the cost of a lounge, fridge or TV without paying a cent extra.
The Federal Court found it was anything but.
Accessing the offer required customers to sign up for a Latitude GO Mastercard—a continuing credit contract, not a one-off instalment plan.
Establishment fees and monthly account service fees applied throughout the promotional period until March 2021. Exorbitant late payment fees also applied.
A consumer purchasing a $1000 item might end up paying over $1500 once accumulated fees were included. None of this sat in the bold “hero” text that defined the campaign. Or they might not have purchased the item at all.
Latitude and Harvey Norman argued that ordinary shoppers should have assumed there were hidden costs lurking somewhere, because “no one expects finance to be free.”
The Full Federal Court rejected this cynical framing. The burden isn’t on consumers to disbelieve advertisements. Consumers are entitled to take the “interest-free” message at face value, it concluded.
Fine print and rapid-fire radio disclaimers did not cure the problem as most consumers would never see or absorb the hidden qualifications and cannot be expected to undertake detailed archaeological work in the footnotes to discover the true costs of an offer.
The campaign’s scale amplified the harm. This was not an isolated oversight but a nationwide advertising strategy meticulously engineered.
The Court highlighted that customers hearing “fees may apply” might think of late fees, not fixed monthly charges that applied automatically.
Latitude faces a $35 million penalty application.
Both companies told the court they would publish apologies on their websites once penalties are set. Harvey Norman framed its apology as an acknowledgment of consumer harm. Latitude insisted its own apology was genuine rather than “performative,” attempting to distance itself from suggestions of reputational rehabilitation by theatre.
Harvey Norman’s regulatory exposure doesn’t end here—it is already facing two class actions: one concerning the same “interest free” campaign and another relating to the sale of allegedly worthless extended warranties.
