Harvey Norman, the retail equivalent of beetroot-stained teeth, is being sued over an allegedly “misleading” ad campaign promoting its “no deposit” and “interest-free” payment methods.
I know, it’s a shock to me, as well. Who’d have thought a company that initially refused to return $6 million in JobKeeper subsidies, and also went rogue replying to former staff and customers on Twitter, allegedly tried pulling the wool over its consumers’ eyes?
Well, the Australian Securities and Investments Commission (ASIC) wasn’t having a bar of Harvey Norman’s actions and has decided to sue the retailer, as well as credit provider Latitude Financial Australia.
Per the ABC, court documents lodged by ASIC said Harvey Norman’s ads didn’t disclose that customers had to sign up for a Latitude GO Mastercard if they wanted to use the retailer’s “no deposit” and “interest-free” payment methods.
The corporate regulator also alleged the ads didn’t represent the true cost of these payment methods, because they didn’t mention customers had to pay monthly account service and establishment fees.
“ASIC is concerned the advertising did not provide consumers with the full picture, that they could only use the interest-free payment method by applying for and using certain Latitude credit cards,” ASIC deputy chair Sarah Court said, per The Guardian.
“These credit cards, ASIC alleges, attracted substantial fees over the course of the 60-month payment term, and exposed consumers to the risks of incurring further debts and charges, as well as potentially affecting their credit rating.”’
The allegedly misleading newspaper, radio and TV ads ran from January 1 2020 and August 11 2021.
The hidden costs associated with the Latitude credit card sounded pretty hefty, according to ASIC.
“For example, a consumer who, during the relevant period after 16 March 2021, purchased a refrigerator with a retail price of $1,000 using the payment method … and paid the 60 monthly instalments on time, would have to pay a minimum total of $1,537 (which would include $537 of monthly account service fees over the course of the 60 month payment term),” the regulator said in court documents.
$537 is absolutely nothing to sneeze at. I could probably fill up my car at the servo at least five times with that.
ASIC is seeking Harvey Norman and Latitude be fined, and also issue corrective advertising admitting to their misleading and deceptive ads.
It basically sounds like the equivalent of being paraded through the town square and getting belted with rotten tomatoes, or in The Simpsons when Bart has detention and writes different phrases on the chalkboard.
In a statement, Latitude said it took the “allegations very seriously and has worked cooperatively with ASIC during its investigation”.
The company also said it wouldn’t “be commenting further at this stage given the matter is before the courts”.
I wonder if #BoycottHarveyNorman will start trending on Twitter again? Only time will tell!