Harvey Norman CEO Signed Off On ‘No Interest’ Campaign That Failed To Reveal Hidden Costs Claim ASIC

The actions of Harvey Norman CEO Katie Page and Chief financial officer Chris Mentis are being questioned in a Sydney Court, after the pair signed off on another ‘No Interest’ and ‘No Deposit’ credit card marketing campaign, that the Australian Securities and Investments Commission claim failed to highlight the fact that those who signed up would be liable for a potentially high interest credit card provided by finance Company Latitude.

ASIC lawyers have told the court 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, consisted of five TV ads, five newspaper ads, and three radio ads, with Harvey Norman management touting 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 and a gift card that grew in size the more a shopper spent.

Justice David Yates was told that the campaign, which was heavily rotated on TV networks, glossed over the potential requirements of the credit card deal.

This is not the first time that the business has spruiked finance packages in partnership with long-time partner Latitude, which have been questioned by regulators.

So concerned over the implications of the campaign the Australian Securities and Investments Commission slapped the ASX-listed duo with legal action in October 2022.

Latitude a key finance partner of Harvey Norman, has not been tracking well of late, with the business revealing in March 2024 a catastrophic 338% drop in after-tax profits.

The business who backs Harvey Norman, finance deals and their 48 and 60 month No Interest free deals, revealed that in 2023 they made a loss of $138 million in 2023, down from a profit of A$58 million the previous year.

Operating income was down 8% to $657.6 million.

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.

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 earlier.

In an odd move lawyer for Nine Entertainment are seeking to make confidentiality claims in regard to evidence in the case.

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David Richards

David Richards has been writing about technology for more than 30 years. A former Fleet Street journalist, he wrote the Award Winning Series on the Federated Ships Painters + Dockers Union for the Bulletin that led to a Royal Commission. He is also a Logie Winner for Outstanding Contribution To TV Journalism with a story called The Werribee Affair. In 1997, he built the largest Australian technology media company and prior to that the third largest PR company that became the foundation company for Ogilvy PR. Today he writes about technology and the impact on both business and consumers.