The Federal Court has ordered Latitude Finance Australia (Latitude) and Harvey Norman Holdings Ltd (Harvey Norman) to pay penalties of $20 million and $35 million respectively for misleading advertising associated with a national interest-free finance campaign. The decision in Australian Securities and Investments Commission v Latitude Finance Australia (No 4) [2026] FCA 989 is noteworthy not only because of the size of the penalties imposed, but also because it demonstrates the growing importance of compliance culture, remediation and genuine accountability in determining regulatory outcomes.

Although the Court found both companies equally responsible for the contravening conduct, Harvey Norman received a penalty almost twice that imposed on Latitude. The case serves as a reminder that, when things go wrong, how a business responds can be almost as important as the conduct itself.

WHAT HAPPENED?

Between January 2020 and August 2021, Latitude and Harvey Norman (through its controlled entities) promoted the purchase of household and electrical goods from Harvey Norman, Domayne and Joyce Mayne stores on “no deposit” and “interest free” terms, repayable over 60 months. The campaign was extensive, running across television, radio and newspaper advertising and reaching millions of Australians.

Liability was established in 2024 and upheld on appeal in 2025. The 2026 proceeding concerned the penalties that should be imposed on each company, as well as whether injunctive and corrective orders should be made.

HOW DID THE ADVERTISEMENTS MISLEAD CONSUMERS?

The courts identified two key omissions.

First, the advertisements failed to disclose that consumers were required to apply for and obtain approval for a Latitude GO Mastercard in order to access the promoted finance arrangement. The card then had to be used to make the relevant purchase.

Secondly, the advertisements failed to disclose that the GO Mastercard attracted both an establishment fee and ongoing account service fees.

At trial and on appeal, Latitude and Harvey Norman argued that consumers would have understood that some costs may accompany a finance arrangement of this nature. The Full Court rejected that argument, finding that an ordinary and reasonable consumer would have understood from the advertising that no additional costs would be payable in connection with the promoted finance offer. Importantly, the Court’s concern was not that the advertisements contained a statement that was literally false. Rather, the overall impression created by the advertisements was misleading because they omitted important qualifying information about the requirement to obtain a GO Mastercard and pay associated fees.

FINE PRINT IS NOT A CURE

Both companies argued that any misunderstanding would ultimately have been corrected before a consumer entered into the transaction. They pointed to disclosures contained in fine print and information provided during the credit application process. The Court was not persuaded.

The newspaper advertisements contained only limited references to the GO Mastercard, with relevant information effectively buried in fine print. The radio advertisements referred vaguely to “fees and exclusions”, while the television advertisements did not refer to the card at all. The Court considered that these disclosures were insufficient to correct the dominant impression conveyed by the advertising.

The decision reinforces a point that businesses sometimes overlook, namely disclosure is not merely a question of whether information is technically available somewhere. The question is whether the information is sufficiently prominent to correct the impression created by the overall advertisement.

HARM IS NOT LIMITED TO FINANCIAL LOSS

The Court also rejected the suggestion that any consumer confusion was harmless because clarification would ultimately occur during the credit application process. While many consumers would eventually learn about the credit card requirement and associated fees, the Court recognised that consumer harm is not limited to financial loss. A consumer who is attracted to an offer, spends time pursuing it and then decides not to proceed upon discovering additional conditions has nonetheless suffered detriment. Equally, a consumer who proceeds with the transaction may have done so in circumstances where their purchasing decision was influenced by a misleading representation.

The Court also observed that consumers who signed up for the GO Mastercard lost a genuine opportunity to compare alternative credit products before making their decision. The case is therefore a useful reminder that regulators and courts increasingly focus on how representations affect consumer decision-making, rather than simply asking whether a consumer ultimately paid more money than expected.

ONE COMPAIGN, TWO VERY DIFFERENT PENALTIES

One of the most interesting aspects of the decision was not the finding of liability, which had already been determined, but the significant difference between the penalties imposed on the two companies. ASIC sought penalties of $50 million against Harvey Norman and $35 million against Latitude. The Court ultimately imposed penalties of $35 million and $20 million respectively.

Importantly, the Court did not materially distinguish between the companies’ responsibility for the contravening conduct. In reaching that conclusion, the Court pointed to the active involvement of both companies in the creation, approval and dissemination of the advertising campaign. Although the Court did not find that either company deliberately set out to mislead consumers, it considered that both were responsible for the omissions that gave rise to the contraventions. The difference in penalty therefore turned largely on what happened after the misconduct.

COMPLIANCE CULTURE MATTERS

The Court was highly critical of the compliance arrangements that existed during the relevant period. It described the state of the parties’ compliance systems as an “extraordinary state of affairs”, particularly given the size, sophistication and resources of the businesses involved.¹

However, the Court also considered the steps taken by each company after the contraventions came to light.
Latitude adduced evidence regarding the remedial measures it had implemented, including enhancements to its advertising review and compliance processes. It accepted responsibility for the misconduct and apologised to affected customers.

Harvey Norman took a markedly different approach. The company did not call evidence explaining its current compliance framework or identifying how its compliance processes had failed, despite the Court describing the absence of such evidence as “a very serious matter for a company the size and scale of Harvey Norman”.² Its apology, offered from the bar table rather than on oath, was given little weight. The Court was also critical of public comments made by Harvey Norman’s Chairman, finding that they demonstrated a disregard for the potential harm suffered by consumers, and ultimately concluded that Harvey Norman had not demonstrated any genuine contrition for its conduct.³ The result was a substantially higher penalty.

The decision demonstrates that courts are increasingly willing to take account of matters such as:

• the effectiveness of a company’s compliance framework;
• the extent and quality of remediation efforts;
• a company’s willingness to acknowledge wrongdoing;
• the quality of evidence put before the Court regarding compliance improvements; and
• whether senior leadership demonstrates genuine accountability.

INJUNCTION REFUSED, BUT PUBLICITY ORDER MADE

ASIC also sought a five-year injunction and a broad corrective publicity campaign across print, television and radio. The Court refused the injunction, finding it unnecessary given the conduct had ceased and existing penalty powers were a sufficient deterrent. It instead made a narrower adverse publicity order, limited to each company’s own website for 90 days, considering that the litigation’s own publicity already meant a wider media campaign would add little.⁴

WHAT DOES THIS MEAN FOR BUSINESS?

The decision contains two important lessons.

First, businesses should focus on the overall impression conveyed by their advertising, not merely whether individual statements are technically accurate. Important qualifications cannot safely be relegated to fine print or left to later stages of the customer journey. The case is a reminder that there can be a fine line between simplifying a message for marketing purposes and creating a misleading impression. Businesses should be cautious about prioritising a promotion’s attractiveness or consumer appeal at the expense of clear disclosure. As Latitude and Harvey Norman demonstrate, the commercial benefits of a catchy message can be substantially outweighed by the regulatory and reputational consequences if key information is omitted.

Secondly, compliance culture now plays a significant role in regulatory outcomes. Businesses that invest in compliance, promptly remediate issues and genuinely accept responsibility when mistakes occur are likely to be treated more favourably than businesses that fail to demonstrate those qualities.

The decision is also a reminder that businesses participating in joint promotional campaigns cannot assume responsibility sits with their commercial partner. Each participant should maintain its own independent compliance oversight and approval processes.

Finally, this decision should be viewed alongside the recent passage of Australia’s unfair trading practices reforms, including the new prohibitions on unfair trading practices, drip pricing and subscription traps. As we discussed in our recent article on those reforms, the regulatory focus is increasingly moving beyond whether a representation is technically accurate and towards whether a business’s conduct, disclosures and customer journey unfairly influence consumer decision-making. This decision reflects that same trend. The Court recognised that consumer harm may extend beyond direct financial loss and include wasted time, lost opportunities and decisions made on the basis of incomplete or inadequately disclosed information. Together, the new reforms and this decision reinforce the importance of clear, prominent disclosure and careful consideration of how consumers are likely to experience a promotion in practice.

HOW CAN WE HELP YOU?

Our Consumer and Contracting Law team regularly advises on advertising techniques, promotional campaigns, and Australian Consumer Law compliance. We can assist with reviewing marketing material for promotional campaigns, particularly large scale or recurring sales events and preparing disclaimers.

This article was written by Teresa Torcasio, Partner and Hana Kolar, Law Graduate.

¹ Australian Securities and Investments Commission v Latitude Finance Australia (No 4) [2026] FCA 989 [209].
² Ibid [176].
³ Ibid [219]-[222].
⁴ Ibid [230]-[231].