In Australian Securities and Investments Commission v Latitude Finance Australia (No 4) [2026] FCA 989, the Federal Court imposed penalties of $35 million against Harvey Norman Holdings Ltd and $20 million against Latitude Finance Australia for misleading conduct and false or misleading representations they made in a national advertising campaign promoting a 60-month interest free and no deposit payment method for goods purchased at Harvey Norman stores. Background.
Latitude and Harvey Norman failed to disclose in those advertisements that:
(a) an essential precondition for acquiring goods pursuant to the advertised payment method was that the consumer has or enters into a continuing credit contract linked to a credit card; and
(b) a consumer taking up the advertised payment method would, in addition to the purchase price, be required to pay a $25 establishment fee (during the period 1 January 2020 to 15 March 2021) and ongoing monthly account service fees, which since 1 January 2020 have increased from $5.95 per month to $10.95 per month.
The higher penalty imposed on Harvey Norman is likely to be appealed against.
Although Justice O’Bryan concluded that Harvey Norman and Latitude were equally responsible for the misleading advertisements, he considered that a higher penalty should be imposed on Harvey Norman in comparison to Latitude “to deter repetition and to motivate Harvey Norman to improve its compliance processes”.
In response to ASIC’s submission that Harvey Norman’s compliance culture was “particularly weak”, Justice O’Bryan observed:
“In relation to Harvey Norman, the evidence adduced with respect to its compliance systems and training can be described as paltry. No witness was called to give evidence about Harvey Norman’s compliance systems and training during the relevant period or presently….
Overall, Harvey Norman failed to establish that, during the relevant period, it had an effective system for seeking to ensure compliance with the consumer protection laws. That is a very serious matter for a company the size and scale of Harvey Norman, the principal business of which is the franchise of retail stores selling furniture, domestic appliances and computing and software products to the Australian public at large…
a striking feature of this case is Harvey Norman’s unwillingness, through a senior executive, to give evidence about Harvey Norman’s compliance procedures during the relevant period, why the procedures were inadequate to prevent the contravening conduct, and the steps that have been taken to prevent future contraventions. In the absence of such evidence, the apology from the bar table rings hollow…”
Referring to a press interview by Harvey Norman’s Chair, Justice O’Bryan observed:
“Mr Harvey is entitled to express his opinions, including about the legal system. However, Mr Harvey’s opinions indicate that the Chairman of Harvey Norman’s sole focus is upon the perceived injustice suffered by Harvey Norman, and a complete disregard for the potential harm suffered by consumers from Harvey Norman’s misleading conduct.
Taking the evidence as a whole, I am not persuaded that Harvey Norman has demonstrated any contrition for its wrongful conduct.”
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Author: David Jacobson
Principal, Bright Corporate Law
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About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.
