Latitude Financial Australia is also a defendant in the lawsuit filed by the corporate regulator.

ASIC also alleges that Harvey Norman and Latitude misled customers about the "true cost" of this payment arrangement.

It said consumers would have to pay a minimum $537 on top of their purchase amount if they signed up for a GO Mastercard between March 15 and August 11, 2021, made a purchase at Harvey Norman using the "60-month interest-free" payment method, and paid the debt off within that time frame.

The retailer and credit card company allegedly failed to mention the establishment fees and monthly account service fees in those ads.

"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.

"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 regulator is seeking fines, injunctions and declaration against Latitude and Harvey Norman.

In a statement, Latitude said the allegations relate to "historic advertisements that ran between 1 January 2020 and 11 August 2021".

The credit card company also said it was reviewing ASIC's claim and "Will not be commenting further at this stage given the matter is before the courts".

Original Story By | David Chau