October 18th 2024.
The country's corporate watchdog has emerged victorious in its legal battle against retail giant Harvey Norman. The case centered around allegations that the company had misled consumers through an advertising campaign promoting interest-free finance options. After a lengthy court battle, the Federal Court has ruled in favor of the Australian Securities and Investments Commission (ASIC), finding that both Harvey Norman and partner company Latitude Finance Australia engaged in misleading conduct and made false representations.
The advertisements in question were released between January 2020 and August 2021, and promoted a 60-month interest-free and no-deposit payment method. However, the ASIC was concerned that these ads were masking the true financial arrangements involved. They alleged that consumers were not being made fully aware that they would be required to take out a credit card, specifically the Latitude GO Mastercard, in order to make purchases.
Deputy chair of ASIC, Sarah Court, explained that the regulator took on the case because they believed many consumers were unaware of the true costs involved in these advertised payment methods. She stated, "In some cases, this may have meant they paid considerably more for purchases than they expected." Court also emphasized the importance of consumers being fully informed about their financial commitments, and having the ability to consider their options before making a purchase.
The court's ruling found that the advertisements had not adequately disclosed the true scope and cost of the promoted payment method. Justice David Yates stated that the statement of the payment method in the ads was presented as a complete statement, when in reality, it was far from complete. He explained that consumers who wanted to make purchases through this method were actually entering into a different financial arrangement, namely a continuing credit contract with Latitude that was linked to a credit card. This contract included additional fees and charges that were not made clear in the advertisements.
As a result of this ruling, ASIC will now seek penalties against both Latitude and Harvey Norman. This could include financial penalties and other forms of relief. 9news.com.au has reached out to Harvey Norman for comment on the matter.
This case serves as a reminder that consumers deserve to be fully informed about their financial commitments and the true costs involved in any purchase. It also highlights the importance of transparency and honesty in advertising, as misleading consumers can have serious consequences. To stay up to date with all the latest news, celebrity updates, and sports news, follow us on our WhatsApp channel. We promise no comments, no algorithms, and the protection of your private information.
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