For years, regulators and consumer advocates have raised concerns about the way major Australian retailers promote “interest-free” finance, now Harvey Norman is facing a multi million dollar hit to the bottom line and millions in legal fees.

After  a lengthy investigation and a failed appeal, the Australian Securities & Investments Commission (ASIC) believes it finally has the leverage needed to impose massive fines on Harvey Norman and Latitude Finance who have relationships with multiple retailers in Australia who use their services for interest free marketing and sales offers.

ASIC is seeking A$85 million in penalties, arguing that the companies’ national “60-month interest-free, no-deposit” advertising campaign misled thousands of shoppers.

The watchdog’s case—already upheld once by the Federal Court—was strengthened even further when three appeal court judges dismissed the companies’ defence as “barely arguable.”

The core issue, according to regulators, is that the promotion obscured the true cost of the finance arrangement. Consumers were widely encouraged to sign up for the 60-month payment plan, but what the advertising failed to highlight clearly was that access to the deal required customers to take out a Latitude GO Mastercard, a credit card with both establishment and ongoing account-service fees.

ASIC maintains that these fees meant many customers paid far more than they anticipated—undermining the very idea of “interest-free.”

A Pattern of Misleading Conduct

Consumer groups note this is not the first time Harvey Norman has been reprimanded for questionable advertising practices. In 2011, the retailer was penalised A$1.25 million for promoting misleading offers in a “3D Finals Fever” catalogue. Over the years, multiple franchisees have also been fined by the ACCC for deceptive sales tactics.

In this latest case, the Court found that from January 2020 to August 2021, Harvey Norman and Latitude’s ads—in print, TV, and radio—conveyed an overly simplistic message: “interest-free, no deposit, 60-month payments.” Regulators argue the messaging left shoppers with an incomplete understanding of the obligations they were signing up for.

The Full Federal Court rejected any suggestion that consumers should have been inherently suspicious of such a deal. The judges were explicit: it was reasonable for people to assume the offer meant what it appeared to mean.

Regulators Push Back Against ‘Performative’ Contrition

Following the failed appeal, Harvey Norman and Latitude attempted to limit the fallout by expressing regret. Their barrister issued an apology, but ASIC criticised it as “performative”—a strategic move, not a genuine acknowledgment of the harm caused.

The watchdog is now pushing for more than monetary penalties. It wants adverse publicity orders, injunctions to prevent future misconduct, and full recovery of legal costs. One possible order would require the companies to publish regular notices admitting they misled consumers.

Industry-Wide Implications

For Harvey Norman, the case represents a significant reputational challenge at a time when consumer trust is already thin. For Latitude, the stakes extend beyond this partnership—its financing model is used across a wide network of Australian retailers.

Regulators hope the action sends a message to the broader retail sector: if you market finance products as simple and fee-free, the fine print can’t covertly say otherwise.