Retail finance provider GE Capital fined $1.5 million for “false or misleading” conduct

GE Capital, the finance and branded credit card provider for several appliance and electronics retailers, has been fined $1.5 million for providing misleading information to customers seeking to increase their credit limits. The fine was levied by the Federal Court after an investigation by the Australian Securities and Investment Commission (ASIC).

For a five month period at the start of 2012, GE Capital told customers applying for credit limit increases that in order to receive a higher ceiling, they had to agree to receive further credit limit invitations. The same ultimatum was also put to customers looking to activate their credit cards. These rules were shown to be “false or misleading”.

Myer and Coles were two retailers specifically named by ASIC as having customers affected by GE Capital’s conduct. GE Capital also offers financial services to Harvey Norman’s group of retail brands, though none of these were named nor are any of their customers known to be affected.

A key part of this case was that GE Capital acted directly in advance of new legislation coming into effect that would have a deleterious on the company.

The Federal Court ruled that:

“The contraventions were serious and the reach of GE Capital’s conduct was extensive and substantial [and that it] was a systematic and deliberate attempt to mislead cardholders into giving their consent to receive invitations for future credit increases so as to avoid losses of up to $6 million which were projected to be suffered by GE Capital as a result of the tightening regulatory environment.”

ASIC welcomed the decision.

“This ruling serves as a reminder that there are important safeguards to help consumers manage their debt levels,” said deputy chairman Peter Kell. “If businesses seek to side-step these, ASIC will not hesitate to use its powers to protect consumers.”

GE Capital was also ordered to pay $50,000 in costs and send an informative notice to 210,000 cardholders.

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One Response to Retail finance provider GE Capital fined $1.5 million for “false or misleading” conduct

  1. Malcolm Baker Sat 5 Jul 2014 at 3:10 pm #

    I went to Harvey Norman to purchase an item which was over my card limit and I was refused by GE I have never mist paying on time or finishing on time It was an embarrassing time to be refused

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