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Harvey Norman and Latitude Financial have both announced plans to appeal against a court ruling that they misled customers into taking out a credit card when buying high-ticket items.
On October 18 the Australian Federal Court ruled both Harvey Norman and Latitude misled consumers in an advertising campaign promoting various payment methods.
The case relates to advertisements on TV, radio and in newspapers between January 2020 and August 2021 in which the companies spruiked 60-month interest-free payments and no need for a deposit when buying high-ticket items from the furniture and electronics retailer.
The case was brought on by the Australian Securities and Investments Commission (ASIC) which was concerned the advertisements masked the fact consumers were required to take out a credit card, such as the Latitude GO Mastercard, to purchase goods.
Customers were hit with extra fees despite the "interest-free" arrangement. (Supplied: ASIC)
The court found Harvey Norman and Latitude misled customers into taking out a credit card when they thought they were signing up to an interest-free payment plan.
It found the advertisements' statement of the payment method was presented as a complete statement, when it was far from complete.
Justice David Yates found that "consumers who wished to make such a purchase had to enter into a fundamentally different financial arrangement than the one promoted".
"Namely, a continuing credit contract with Latitude that was linked to a credit card (the GO Mastercard), whether or not they wanted a credit card (let alone a GO Mastercard), which required them to pay an establishment fee and ongoing monthly account service fees in respect of that linked account."
The court found the arrangement with Latitude was fundamentally different to the one advertised. (ABC News: John Gunn)
ASIC deputy chair Sarah Court at the time said ASIC launched the case because it believed many consumers might have been unaware of the financial arrangements they were entering into when they bought everyday products at Harvey Norman stores.
"In some cases, this may have meant they paid considerably more for purchases than they expected," she said.
At the time of the judgement, ASIC was seeking relief including pecuniary penalties against Latitude and Harvey Norman.
A hearing to determine any penalty is likely to be scheduled after May 19, 2025.
Harvey Norman and Latitude Financial notified shareholders of their plans to apply for leave to appeal the judgement on the Australian Securities Exchange on Tuesday afternoon — the final day they were allowed to file an application to appeal.
ASIC has been contacted for comment.