The Australian Securities and Investments Commission launched action against the store chain and credit provider Latitude Finance Australia in the Federal Court in 2022.
The watchdog claimed the ads "masked" the fact consumers were required to take out a credit card, such as the Latitude GO Mastercard, to purchase goods.
On Friday the court found the ads, which promoted "no-deposit" and "interest-free" payment methods between January 2020 and August 2021, painted an incomplete picture for consumers.
"Consumers who wished to make such a purchase had to enter into a fundamentally different financial arrangement than the one promoted," Federal Court Justice David Yates stated in his ruling.
ASIC alleged the ads, which featured in newspapers, radio and on television stations across Australia, contravened consumer laws.
The watchdog said in a statement it will be asking the court to impose financial penalties on the companies.
ASIC deputy chair Sarah Court said in some cases customers may have paid considerably more for purchases than they initially expected.
"The financial obligations under a credit card are different to what was advertised by Harvey Norman," Ms Court said.
"A continuing credit contract can involve multiple advances of credit together with monthly account service fees and high interest rates, all of which add up for consumers.
"Consumers deserve to be fully informed so that they can consider their current financial position and decide if a credit card is the appropriate product for them."
Latitude has been contacted for comment.
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