Australian Securities and Investments Commission v Latitude Finance Australia (No 2)

This page explains a Federal Court liability judgment involving ASIC, Latitude Finance Australia and Harvey Norman Holdings. It is written cautiously because the text available here cuts off before the full disposition section can be checked in detail.

What can be stated confidently is that the Court delivered reasons on 18 October 2024, that the case concerned alleged misleading finance advertising, and that the Court ordered the parties to bring in agreed or competing draft orders by 28 October 2024. What cannot be stated confidently from the text available here is the complete final set of liability findings and the precise relief ultimately ordered against each respondent.

ASIC brought the proceeding against Latitude Finance Australia and Harvey Norman Holdings over a broad national campaign promoting the purchase of home and electrical goods from Harvey Norman stores. The campaign ran during the period 1 January 2020 to 11 August 2021 and used newspapers, radio and television. The core sales message was familiar and commercially powerful: customers could buy now and pay over 60 months on “no deposit” and “no interest” terms.

ASIC said that message did not match the real financial arrangement. According to the Court record, ASIC’s case was that the payment method looked like a one-off loan for the purchase price, but it was not. To access the promotion, consumers had to have, or apply for and be approved for, an eligible credit card issued by Latitude. ASIC also alleged that the advertisements did not disclose, or did not adequately disclose, the establishment fee and monthly account service fees associated with the account linked to that credit card.

The scale of the campaign mattered. The defendants admitted that the television advertisements were broadcast on at least 900,000 occasions on 367 stations, the radio advertisements were broadcast on 143 radio stations, and the newspaper advertisements were published in 168 newspapers. ASIC argued that this repetition reinforced the dominant message and meant consumers were likely to think they already knew the deal, making them less attentive to qualifications in later exposures.

The proceeding was run by reference to 11 representative advertisements rather than every ad in the campaign. That is common in large advertising cases. The Court’s reasons, as available here, show a structured analysis of representative newspaper, radio and television ads, followed by broader findings about familiarity with personal credit, cumulative effect, consumer evidence and inferences.

The newspaper advertisements shared a common structure. They used a large red banner with the words “60 MONTHS INTEREST FREE” in large white letters. This was accompanied by “NO DEPOSIT NO INTEREST” and then “with 60 equal monthly payments until [month/year inserted]. Minimum financed amount $1000.” Under those banner statements appeared smaller text such as “Offer ends [date]. Apply in store/online. Available for in-store and selected online purchases. Approved applicants only. Fees & charges apply. Interest applies if you do not comply with terms and conditions.”

Some newspaper ads repeated the banner statements more than once. A separate bonus gift card offer was also presented prominently. The Court record notes that each representative newspaper advertisement included tightly packed text in very small lettering over several lines. In one extended set of terms, the ad expressly referred to approved Latitude Go Mastercard customers, stated that a $25 establishment fee applied to new approved applicants, and that an account service fee of $5.95 per month applied. The Court also observed that the formatting used in the reasons made the text easier to read than it would have been in the newspaper itself, where the text ran across a wider field on newsprint, making it challenging to read.

The radio advertisements were each 30 seconds long. They promoted the interest-free offer and bonus gift card in an upbeat style. The Court record notes that some qualifying words were spoken more softly and delivered rapidly, as an aside. The television advertisements used spoken promotional claims, product footage and on-screen text. The available text includes a detailed description of one representative television ad and notes that some textual graphics appeared only ephemerally on screen.

For businesses, that presentation detail is important. Advertising law does not only ask whether the qualification exists somewhere. It asks what message the ordinary consumer is likely to take away from the ad as a whole, in the form and pace in which the ad is actually encountered.

The legal issue was whether the representative advertisements conveyed misleading impressions to ordinary and reasonable consumers, contrary to the ASIC Act provisions identified in the reasons, including ss 12DA(1), 12DF(1) and 12DB(1)(a), (i) and (g). The Court was not simply checking whether every statement was literally false. It had to determine what overall impression the ads conveyed in context.

The catchwords and introductory parts of the reasons show two central alleged impressions. First, that the material terms of the payment method were only those referred to in the promotion itself. Second, that the consumer would only be liable to pay the price of the goods by way of 60 equal monthly payments, or alternatively that any fees or charges would be relatively insubstantial. ASIC said those impressions were misleading because access to the promotion depended on an eligible Latitude credit card and involved an establishment fee and monthly account service fees.

The Court’s table of contents also shows the structure of the analysis. There were sections dealing with ASIC’s submissions, Latitude’s submissions, Harvey Norman’s submissions, the law, and then consideration of the representative advertisements. The reasons also included sections on general findings, familiarity with personal credit, cumulative effect, whether ASIC’s case was an all-or-nothing case, consumer evidence and inferences. That tells business readers something useful: these cases are not decided only by reading isolated words. Courts consider context, consumer behaviour, repetition, and how real people process advertising.

The reasons available here contain useful detail about how the campaign was organised and evidenced. ASIC tendered samples of media bookings, invoices and advertising calendars to demonstrate the scale of the campaign. The evidence also included invoices rendered by Harvey Norman on Latitude for marketing support. That kind of material matters in regulator proceedings because it helps show who was involved in preparing, approving, funding or causing the advertisements to be published.

The Court record also notes an issue about Harvey Norman’s role. Harvey Norman initially denied involvement in the advertising campaign and said that Generic Publications Pty Limited, a wholly owned subsidiary, arranged the campaign. In opening submissions, however, Harvey Norman acknowledged that for the purposes of the proceeding the conduct of Generic Publications in arranging the campaign could be taken to be the conduct of Harvey Norman. For business groups, that is a practical reminder that corporate structure does not necessarily keep a parent or holding entity out of the frame if the conduct can properly be attributed to it in the proceeding.

The newspaper terms also referred to Harvey Norman stores being operated by independent franchisees. Even so, the proceeding was brought against the corporate entities involved in the campaign. That is commercially significant for franchise networks and retail groups. National promotions often involve head office branding, lender support, franchisee participation, media buying and agency input. If the core message is problematic, multiple entities may be exposed to scrutiny.

The proceeding was split into separate hearings on liability and relief. The reasons state that on 10 November 2022 the Court ordered separate hearings on those questions, and on 17 April 2023 made a further order for the listing of the proceeding for a hearing on liability. The hearing dates recorded in the reasons were 15 to 18 April 2024 and 13 May 2024.

The judgment delivered on 18 October 2024 was therefore a liability judgment. The orders reproduced in the reasons state that the parties were to bring in agreed draft orders, or if agreement could not be reached, competing draft orders, by 4.00 pm on 28 October 2024. That procedural setting is important. It means this decision was not yet the final penalties and relief stage.

The text available here includes the heading “DISPOSITION [507]”, but the extract cuts off before that part can be checked in full. Because of that, this page does not state any final declarations, injunctions, pecuniary penalties or adverse publicity orders as if they were confirmed. The reasons do show that ASIC sought those forms of relief in the proceeding, but the exact outcome should be checked against the complete judgment and any later orders before being treated as final.

For business owners, the practical message is about alignment between the headline promise and the real transaction. If your advertisement says a customer can buy goods with equal monthly payments, no deposit and no interest, but the customer must first enter a separate revolving credit arrangement, apply for a card, or pay account fees, those features may be part of the core offer. They may need to be stated clearly and prominently in the ad itself.

This is especially important for retailers, franchise groups and finance providers running co-branded promotions. The Court materials show that ASIC focused on the overall impression created across multiple media, not just on whether some qualification existed somewhere in the campaign. A qualification that is tiny in a newspaper, rushed in a radio ad, or flashed briefly on screen may not cure a misleading headline.

Businesses should also pay attention to repetition. A campaign repeated across television, radio, print and online can reinforce the same dominant message over time. If the dominant message is inaccurate or incomplete, repetition can make the problem worse rather than better.

Finally, governance matters. Keep records of who designed the campaign, who approved the wording, what the actual finance product required, and whether legal review considered the customer’s real path from advertisement to approval and purchase. In a regulator investigation, those documents can become central.