Major retailer Harvey Norman and credit card issuer Latitude Financial Services were fined $35 million and $20 million respectively by the Federal Court on Tuesday for publishing thousands of unlawful ads over 19 months.
The pair teamed up in 2020 to promote the purchase of home and electrical goods by equal monthly repayments over five years with no deposit or interest terms.
But the court found the promotions did not reveal customers were required to enter into a credit contract with Latitude linked to a credit card account.
Customers who took up the deal were then liable for an establishment fee and monthly account service fees, Justice Michael O'Bryan said.
"Harvey Norman and Latitude were equally responsible for the misleading advertisements," Justice O'Bryan said.
"The misleading conduct was serious and extensive."
The advertisements, which put sales and the companies' commercial interests above the interests of consumers, would have been viewed by millions of Australians and the full cost of the unlawful campaign will likely never be fully known, the judge said.
"However, it's likely consumers suffered harm that is financially unquantifiable," Justice O'Bryan said.
"It's likely both defendants benefited financially from the misleading conduct."
The corporate watchdog, which prosecuted the companies, said the combined penalty was the biggest fine it had obtained for misleading conduct relating to financial services.
"Businesses must give consumers a clear and accurate picture of the products they are promoting and the costs that come with them," Australian Securities and Investments Commission Chair Sarah Court said.
Both large companies should have been well aware of Australian laws, which made the scale of the contraventions extraordinary, Justice O'Bryan said.
"Evidence suggests neither company had a suitable process for ensuring their advertising complied with the consumer protection laws," he said.
Justice O'Bryan found Latitude has improved its compliance processes since the judgement was first handed down in 2024.
But Harvey Norman showed no evidence of improvement or even offered an apology to affected consumers, the judge said.
"Public statements made by Harvey Norman's chairman show a disregard for the potential harm suffered by consumers from Harvey Norman's misleading conduct," Justice O'Bryan said.
On top of the fines, the companies are required to publish corrective advertising on their websites for 90 days.
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