Terms and conditions spat as ASIC takes on Latitude Finance, Harvey Norman over credit cards

A case against Latitude Finance and Harvey Norman has kicked off in the courts, with ASIC arguing the two companies sold customers credit cards without revealing the fine print.

A case against Latitude and Harvey Norman has kicked off in the courts, with ASIC arguing the two companies sold customers credit cards without revealing the fine print. Picture: NCA NewsWire/ Gaye Gerard

Senior executives at Harvey Norman and Latitude Finance allegedly signed off on a promotion campaign spruiking no interest and no deposit credit cards, in an advertising blitz that now sees the companies facing the ire of the corporate regulator.

A court heard on Monday that Harvey Norman and Latitude aggressively pushed a financing scheme across television, print, and radio advertising but left in the small print revealing the need to sign on to a potentially high interest credit card vague and often unsaid.

The case comes after the Australian Securities and Investments Commission slapped the ASX-listed duo with legal action in October 2022.

The regulator sought to argue on Monday that the ad campaign, cooked up between Latitude and Harvey Norman, saw consumers loaded up with credit cards they didn’t want and take on a risky form of debt that was likely unsuitable for them.

The campaign, played out over five TV ads, five newspaper ads, and three radio ads, saw Harvey Norman tout up to 60 months interest free.

The regulator claims the ad campaign failed to disclose the monthly account service fees tied to the Latitude MasterCard being offered by Harvey Norman in combination with a gift card that grew in size the more a shopper spent.

The court heard Harvey Norman benefited from the ad blitz, with shoppers pouring into shops to snap up new TVs and electronic items tied into its sales campaign while Latitude saw its book of customers swell. Harvey Norman was paid a fee for every consumer signed up to a Latitude MasterCard.

ASIC counsel Naomi Sharp SC told the court executives at Harvey Norman, including chief executive Katie Page and chief financial officer Chris Mentis, signed off on the campaign, while Latitude retailer Australia general manager Brad Symmons also gave the blitz the OK.

Ms Sharp told Justice David Yates the campaign, which enjoyed heavy rotation, glossed over the potential requirements of the credit card deal.

The court heard several TV and radio ads for the campaign sped up as an announcer read a disclaimer about terms and conditions.

But Latitude pushed back, with Richard McHugh SC telling the court consumers could understand there was more to it than indicated in the ads. “The fact that that language is being spoken would indicate to an ordinary listener that there are terms and conditions … that’s how a radio advert works,” he said.

Appearing for Harvey Norman, Peter Brereton SC said the campaign did not seek to mislead consumers.

But Ms Sharp said both companies were taking an “artificially narrow view” of the alleged contraventions.

The case is set down for hearing over five days, but ASIC has flagged it may close its submissions on Tuesday.

The court will also hear from lawyers for Nine Entertainment who are seeking to make confidentiality claims in regards to evidence in the case.

ASIC’s case against Latitude over the company’s credit card offers comes as the latest in a string of matters taken to court.

The regulator secured a $15m fine against ANZ over the bank’s credit card products in September last year. American Express is facing a hearing in May to determine its penalties after ASIC took action over the sale of its cards at retailer David Jones.

Harvey Norman shares fell 2.1 per cent at $4.72, while Latitude added 0.4 per cent to $1.175.