Harvey Norman finance provider GE Money faces legal action

Consumer credit provider GE Money — the company responsible for providing finance to Harvey Norman, Coles and Myer, among other retailers — is facing legal action in the federal court for allegedly misleading consumers into applying for higher credit limits.

The legal action is being brought against GE Capital Finance Australia (trading as GE Money) by the Australian Securities and Investments Commission (ASIC). ASIC is “seeking financial penalties against the company for making false or misleading representations” according to a statement from the regulator.

ASIC alleges that during the period between 5 January 2012 and 27 May 2012, GE Money called and wrote to its customers saying “that they had to give GE Money consent to send them unsolicited credit limit increase offers before it would activate their credit card or give them a credit limit increase”.

According to the National Consumer Credit Protection Act, credit providers (including the likes of GE Money) are prohibited from making unsolicited offers to increase people’s credit card limits. ASIC argues that, in the case of GE Money’s contravention, consumers were still able to activate their credit cards or increase their credit limit with the unsolicited offer from GE Money.

“New laws around the sending of credit limit increase offers were designed to assist consumers to actively choose how to manage their credit limit,” said ASIC deputy chairman, Peter Kell.

The matter has been listed for a directions hearing in the Federal Court on 14 November 2013, and ASIC is “seeking a declaration that GE Money engaged in misleading and deceptive conduct and made false and misleading representations, and a fine”.

ASIC did not confirm which consumers were affected by GE Money’s actions, but did note that GE Money’s customers include those with Myer- and Coles-branded credit cards and the Harvey Norman GO MasterCard.

Leave a Reply

Your email address will not be published. Required fields are marked *

*