Latitude Finance Australia v Australian Securities and Investments Commission

Latitude Finance Australia v Australian Securities and Investments Commission [2025] FCAFC 124 is a Full Federal Court decision about retail finance advertising and the overall message that advertising conveys to ordinary consumers. The case arose from a national campaign promoting selected Harvey Norman goods as available by 60 equal monthly payments on no deposit and no interest terms. ASIC said that message was misleading because the real arrangement required consumers to enter a continuing credit contract linked to a credit card account and to pay additional fees.

The Full Court granted leave to appeal from declaratory orders made at first instance, but dismissed the appeals. The Court agreed with the primary judge’s assessment of what ordinary and reasonable consumers would understand from the advertisements. For businesses, the case is a practical reminder that courts look at the substance of the advertising message, not just whether detailed terms exist somewhere else in the customer journey.

The advertising campaign ran during the period from 1 January 2020 to 11 August 2021. According to the Court, Harvey Norman and Latitude prepared and published a large number of advertisements across Australia promoting the purchase of home and electrical goods from Harvey Norman stores by equal monthly payments of the purchase price over 60 months on “no deposit” and “no interest” terms. The campaign was broad and repeated. Newspaper advertisements appeared in 168 newspapers, radio advertisements were broadcast on 143 stations, and television advertisements were broadcast on at least 900,000 occasions on 367 specified stations.

The trial did not examine every advertisement individually. Instead, it proceeded by reference to 11 representative advertisements, being five newspaper advertisements, three radio advertisements and three television advertisements. The primary judge described those advertisements in detail in the first instance reasons. The Full Court said there was very little dispute about the primary facts. ASIC relied on witness evidence including four consumers. Latitude relied on evidence from two employees and an expert report concerning consumer credit products.

ASIC alleged that the advertising breached the ASIC Act in several ways. It said the campaign involved misleading or deceptive conduct in relation to financial services, conduct liable to mislead the public as to the nature or characteristics of financial services, and false or misleading representations connected with the supply or promotion of financial services. ASIC sought declarations and also sought further remedies including injunctions, pecuniary penalties and adverse publicity orders.

The Court recorded that Harvey Norman was responsible for publication and broadcasting of the advertisements, while Latitude was involved in developing and approving their content. That detail matters commercially. It shows that in a co-branded finance promotion, responsibility may attach both to the retailer whose stores and products are being promoted and to the finance provider whose product sits behind the offer.

ASIC’s case had two main branches, and the Full Court adopted the same structure used by the primary judge.

The first branch was the payment method case. ASIC alleged that the advertisements conveyed that a consumer could purchase selected goods at Harvey Norman by a payment method made up of 60 equal monthly payments of the purchase price on no deposit and interest-free terms. ASIC said that was misleading because an essential precondition was not disclosed. The consumer had to have, or apply for and be approved for, a credit card issued by Latitude, and had to use that credit card or the account linked to it to purchase the goods. In the primary judge’s words, referred to by the Full Court, consumers had to enter into a fundamentally different financial arrangement to the one promoted, namely a continuing credit contract with Latitude.

The second branch was the fees and charges case. ASIC alleged that the advertisements conveyed that the consumer would only pay the purchase price by way of 60 equal monthly payments. ASIC said that was misleading because the consumer also had to pay an establishment fee for some accounts and monthly account service fees. The Court recorded that before 16 March 2021 consumers were required to pay a $25 establishment fee and a monthly account service fee of $5.95. From 16 March 2021 the monthly account service fee became $8.95. The reasons also noted that since early 2023 the fee has been $9.95, although that later amount fell outside the advertising period in issue.

The Full Court noted the primary judge’s finding that these undisclosed matters were material. On the payment method branch, ordinary and reasonable consumers had a real and legitimate interest in knowing the fundamental terms and conditions of the arrangement they were being invited to enter. On the fees branch, the monthly account service fee over a 60 month period could be substantial. The Court repeated ASIC’s illustration that a consumer buying a refrigerator priced at $1,000 under the promotion on or after 16 March 2021 would pay a minimum of $1,537 over the payment period, with $537 attributable to monthly account service fees, ignoring the later fee increase.

The appeal was not presented as a major dispute about legal principle. The Full Court said the draft grounds of appeal raised no point of law or legal principle and did not challenge any findings of primary fact. Instead, the grounds principally concerned what an ordinary and reasonable consumer would have understood or been led to believe from the advertisements.

That is a familiar but important issue in misleading conduct cases. The court asks what message the advertisement conveys to the target audience when viewed as a whole. Here, the applicants challenged the primary judge’s central finding that ordinary and reasonable consumers would understand the advertisements to mean that they could purchase eligible goods at the advertised price, without paying a deposit, by making 60 equal monthly payments, and that if they made those payments they would not be charged interest and would not be required to make any other payment or undertake any other financial commitment beyond those instalments. The Full Court referred to that as the promotional message.

The applicants argued that this attributed an unrealistic level of naivety to consumers. They said the banner statements were obviously not a complete set of terms, that the advertisements were accompanied by fine print, footnote marks or spoken words, and that ordinary consumers know borrowing money comes at a cost and finance products always have terms and conditions. They even argued that consumers would know the offer was too good to be true and would understand it as puffery.

The Full Court rejected that approach. It said the primary judge’s central finding reflected precisely what the advertisements stated. The Court also said there was nothing extraordinary, unusual or patently exaggerated about the promotion. It was a simple transaction, offered for a limited period, on stated terms. In those circumstances there was no reason for a consumer to doubt or second-guess the offer, and no reason to suspect it was mere puffery.

The Full Court granted leave to appeal but dismissed the appeals. It said there was no error in the primary judge’s assessment and that the proposed grounds lacked merit and were barely arguable. Even so, leave was granted because the principal proceeding had already been disrupted, the penalty hearing had been stayed for a considerable period, and the Court had already heard full argument on the issues.

On the substance, the Court agreed with the primary judge’s conclusions about the meaning conveyed by the advertisements. It rejected the applicants’ submission that ordinary and reasonable consumers would be inherently wary or circumspect about the claims made. The Court said the response of consumers depends on the nature of the product and the claims being made, and it rejected any general assumption that consumers in this case would approach the advertisements with scepticism.

The Court also made an important practical observation. It said ordinary and reasonable consumers would have assumed that the offer in the advertisements was stated accurately, particularly in light of Australia’s strong consumer protection laws. That is a significant point for advertisers. A business cannot safely rely on the idea that consumers will expect hidden catches and therefore not be misled.

The result was that the declaratory findings of contravention remained in place. The Court’s orders provided that the appeals be dismissed, that ASIC and the applicants file written submissions on costs, and that the question of costs be determined on the papers unless oral hearing was requested. The reasons also state that, following dismissal of the appeals, the timetable for the further hearing on relief was reinstated.

The published reasons identify three key ASIC Act provisions.

Section 12DA(1) prohibits conduct in relation to financial services that is misleading or deceptive or likely to mislead or deceive. This was central to both branches of ASIC’s case.

Section 12DF(1) prohibits conduct liable to mislead the public as to the nature or characteristics of financial services. This was part of the declaration dealing with the payment method branch.

Section 12DB(1) deals with false or misleading representations in connection with the supply, possible supply, or promotion of financial services. The declarations referred specifically to s 12DB(1)(a), concerning representations that services are of a particular standard, quality, value or grade, s 12DB(1)(g), concerning representations with respect to the price of services, and s 12DB(1)(i), concerning representations about the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy.

For business readers, the practical point is that the same advertising campaign can trigger multiple overlapping provisions where the overall message misstates the nature of the product, the price actually payable, or the conditions attached to the offer.

The timeline helps explain where this decision fits.

The relevant advertising ran from 1 January 2020 to 11 August 2021. ASIC then brought proceedings in the Federal Court. The primary judge decided liability in Australian Securities and Investments Commission v Latitude Finance Australia (No 2) [2024] FCA 1205 and made declaratory orders on 5 November 2024. On the same day, orders were made timetabling a further hearing on relief sought by ASIC, scheduled for 19 May 2025.

On 19 November 2024, Latitude and Harvey Norman filed separate applications seeking leave to appeal from the declaratory orders. Because the declarations did not finally determine the rights of the parties, leave was required under s 24(1A) of the Federal Court of Australia Act 1976 (Cth). On 10 December 2024, an interlocutory application was brought to vacate the timetabling orders for the hearing on further relief pending determination of the leave applications, and orders to that effect were made.

On 21 May 2025, orders were made consolidating the two leave applications into a single proceeding. The Full Court heard the matter on 28 August 2025, granted leave to appeal, and dismissed the appeals. The reasons were published on 3 September 2025. The Court then reinstated the timetable for the further hearing on relief.

The Court expressed regret that the proceeding had been fragmented by interlocutory appeals from declaratory orders and commented that, in cases of this kind, a stay of the hearing on relief should not be granted unless the proposed grounds of appeal have reasonable prospects of success and the balance of convenience otherwise favours a stay.

This case is best read as a warning about the gap between the headline promise and the real legal arrangement. If your advertising says a customer can buy goods by equal monthly payments on no deposit and no interest terms, but the customer must actually enter a continuing credit contract linked to a credit card and pay account fees, a court may treat those hidden features as changing the nature of the offer itself.

The decision is also important because of what it says about consumer assumptions. Businesses sometimes assume that consumers know finance products always come with catches, or that fine print and footnotes will be enough to neutralise a strong headline claim. The Full Court did not accept that reasoning here. It treated the promotional message as clear, attractive and believable. It also said consumers would assume the offer was stated accurately, especially given Australia’s consumer protection laws.

That means compliance review should start with the commercial mechanics of the offer, not with the disclaimer. Ask these questions. What product is the customer really entering? Is it a one-off instalment arrangement, or a continuing credit contract? Does the customer need to apply for a credit card or linked account? What fees are payable over the life of the arrangement? Does the headline message fairly reflect those realities?

Businesses running finance promotions should review more than the final contract. The risk in this case arose from the advertising message itself. In practice, that means reviewing the full campaign set, including newspaper layouts, radio scripts, television storyboards, voiceovers, supers, footnotes, online banners and point-of-sale material. If the same campaign concept appears across multiple channels, the overall message should be tested in each format.

It is also sensible to review the internal approval chain. The Court recorded that Harvey Norman was responsible for publication and broadcasting, while Latitude was involved in developing and approving the content. In many businesses, marketing, sales, legal and external finance partners all touch the campaign. If responsibility is spread across several parties, each should understand the actual product mechanics and the total cost implications before the campaign goes live.

Finally, review examples and worked figures. The Court highlighted ASIC’s example showing how monthly account service fees could substantially increase the total amount paid over 60 months. If a promotion uses a low monthly figure to attract attention, the business should test whether the total cost story remains fair and accurate when all mandatory charges are included.

This page summarises the Full Federal Court decision in Latitude Finance Australia v Australian Securities and Investments Commission [2025] FCAFC 124. The Court recorded a judgment date of 28 August 2025 and a reasons date of 3 September 2025. The appeal was from Australian Securities and Investments Commission v Latitude Finance Australia (No 2) [2024] FCA 1205.

The available reasons state that the appeals were dismissed and that the timetable for the further hearing on relief was reinstated. They also record that costs submissions were to be filed after publication of the reasons. If you need the final position on penalties, injunctions, adverse publicity orders or costs, those matters should be checked in the later procedural record.