The $55 Million Wake-Up Call for Businesses Advertising Interest-Free Finance
- 4 days ago
- 3 min read
Australian businesses promoting finance offers should take note of a recent Federal Court decision that resulted in Harvey Norman and Latitude being ordered to pay a combined $55 million in penalties for misleading advertising.
The case serves as a timely reminder that businesses offering credit, interest-free finance or payment plans must ensure their advertising accurately communicates the full terms of those offers. Failure to do so can expose businesses to significant financial penalties, reputational damage and increased regulatory scrutiny.
The Federal Court Decision
Following an investigation by the Australian Securities and Investments Commission (ASIC), the Federal Court found that Harvey Norman Holdings Ltd and Latitude Finance Australia made false or misleading representations about interest-free payment promotions that ran between January 2020 and August 2021.
The promotions advertised customers could pay for purchases over 60 months with no deposit and no interest. However, the advertising failed to make it sufficiently clear that consumers were also required to apply for and use a Latitude credit card to access the offer.
Consumers who entered into the arrangement became liable for additional costs, including establishment fees and ongoing monthly account fees, important information that ASIC argued should have been prominently disclosed.
As a result, the Court imposed penalties of:
$35 million against Harvey Norman Holdings Ltd
$20 million against Latitude Finance Australia
The combined $55 million penalty is reportedly the largest obtained by ASIC for misleading advertising of this kind.
Why Transparency Matters
Advertising finance products is about far more than promoting attractive payment options.
Australian consumer protection laws require businesses to provide clear, accurate and transparent information so consumers understand exactly what they are agreeing to before making purchasing decisions.
If significant conditions or ongoing costs are hidden, minimised or omitted altogether, consumers may make decisions they otherwise would not have made.
According to ASIC Chair Sarah Court, consumers were entitled to understand that the advertised offer involved more than simply paying for purchases over 60 instalments. The advertisements encouraged consumers into an ongoing credit arrangement carrying additional costs and obligations that were not adequately communicated.
A Strong Warning for Australian Businesses
Justice O'Bryan was critical of both companies, stating that they prioritised commercial interests over consumer interests.
In addition to the financial penalties, both Harvey Norman and Latitude have been ordered to display corrective advertising prominently on their website home pages for 90 days.
The decision reinforces an important message for businesses across Australia:
Marketing material must accurately reflect the complete offer.
Significant fees and conditions should never be hidden or downplayed.
Promotional campaigns should be reviewed for compliance before publication.
Transparency helps protect both consumers and business reputation.
What This Means for Franchisors and Franchise Networks
Many franchise businesses promote finance options, payment plans or third-party lending arrangements to customers.
Whether the promotion is delivered through national marketing campaigns, franchisees, finance partners or digital advertising, businesses should ensure:
All advertising accurately explains eligibility requirements.
Any fees, charges or ongoing obligations are clearly disclosed.
Marketing materials comply with Australian consumer protection requirements.
Franchisees receive consistent guidance on approved advertising.
Strong compliance processes can significantly reduce regulatory risk while building greater consumer trust.
How Bane Legal Services Can Help
When regulatory investigations arise, obtaining experienced commercial legal advice early can make a significant difference.
While Bane Legal Services is not a law firm and does not provide legal advice, we help Australian businesses connect with experienced commercial lawyers who understand consumer law, franchising, retail operations, finance arrangements and regulatory compliance.
Drawing on more than 30 years of business experience, we act as your trusted legal matchmaker—helping you find the right legal expert for your particular business situation.
Whether you need assistance reviewing advertising practices, managing regulatory investigations or strengthening compliance systems, we can connect you with the right legal professional.
Final Thoughts
The Federal Court's decision demonstrates that transparency in advertising is not simply good business practice, it is a legal obligation.
Businesses promoting finance products, payment plans or credit arrangements should regularly review their advertising to ensure customers receive complete and accurate information before making purchasing decisions.
Clear communication protects consumers, strengthens trust and helps businesses avoid costly regulatory action.
Source: Franchise Executives, "Harvey Norman and Latitude fined $55 million after ASIC probe", by Harry Booth, published 29 July 2026. This article reports on proceedings brought by the Australian Securities and Investments Commission (ASIC).
Disclaimer: Bane Legal Services is not a law firm and does not provide legal advice. We are Australia's trusted legal matchmaker, connecting business owners with experienced commercial lawyers based on more than 30 years of business experience.
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