If you wanted to take advantage of an “interest free” offer from Harvey Norman in 2020 and 2021 it probably didn’t seem a deal breaker that to secure your purchase you needed to do it with a credit card from Latitude Finance.

That is until you started checking your credit card statements. Because if you did, you would have seen that the fees and charges for having the card were probably cancelling out any savings or benefits you hoped for in making your purchase “interest free.”

All this has come to light this week as the corporate regulator ASIC sued both Harvey Norman and Latitude over the promotion, which ran from January 2020 to August 2021.

Over this period, ASIC claimed that the ads promoting “no deposit, interest free” payment methods were misleading.

For a start, there was initially no mention that the deal was only available if consumers applied for a Latitude GO Mastercard and used it for the Harvey Norman payment.

According to ASIC, consumers who then signed up for the credit card and made a purchase using the 60 months interest-free method, could have paid around $537 in card fees on top of their purchase amount.

“These credit cards, ASIC alleges, attracted substantial fees over the course of the 60-month payment term, and exposed consumers to the risks of incurring further debts and charges, as well as potentially affecting their credit rating,” said ASIC Deputy Chair Sarah Court.

Anyone taking out the deal could be forgiven for missing the point. According to ASIC, the terms, conditions and fees were disclosed, but they were in the small print in the newspaper, in “tiny text” on television screens and “read at a greater speed and in a more subdued tone” in the radio ads.

Some card holders were charged an establishment fee of $25 and a monthly fee of $5.95 while others were charged a monthly fee of $8.95. Additional monthly fees applied when the balance on the card was more than $10.

The allegedly misleading effect was not “clearly and prominently corrected by any qualifying statements elsewhere in the advertisements,” ASIC says.

“These fees were substantial, and could comprise a substantial proportion of the overall repayments.

“For example, a consumer who, during the relevant period after 16 March 2021, purchased a refrigerator with a retail price of $1,000 using the payment method … and paid the 60 monthly instalments on time, would have to pay a minimum total of $1,537 (which would include $537 of monthly account service fees over the course of the 60 month payment term).”

All of which goes to prove, yet again, the old adage that if something sounds too good to be true, then it probably is. And if something is offered interest free, it’s probably in their interest and not yours.

Harvey Norman is yet to respond, but Latitude has issued a statement saying it “takes these allegations very seriously and has worked cooperatively with ASIC during its investigation”.

“Latitude is now reviewing ASIC’s claim and will not be commenting further at this stage given the matter is before the courts.”

As a response, ASIC has Harvey Norman and Latitude to pay a fine and take out corrective advertising, three times a week for two weeks, admitting to misleading and deceptive conduct.

If they agree it will be interesting to see if they give them as much prominence as the terms and conditions of the original offer.


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