The Federal Court has fined GE Capital Finance Australia, which trades as GE Money, with $1.5m for misleading more than 700,000 credit card customers.
The misleading representations came to light when Australian Securities & Investments Commission (ASIC) filed a legal action against GE Capital Finance Australia in October 2013.
According to the court findings, the company had forced some credit card customers to activate their credit cards or obtain an increased credit limit by sending invitations to apply for credit limit increase during 5 January and 27 May 2012.
The court fined GE Capital as it allegedly sent the invitations after the government initiated a law to prohibit credit card firms from sending invitations to increase card limits.
The court said what was involved was an attempt to obtain consents in an unlawful manner, and the adoption of a cynical approach by seeking to make the cardholders’ choices less straightforward.
ASIC deputy chairman Peter Kell said: "This ruling serves as a reminder that there are important safeguards to help consumers manage their debt levels. If businesses seek to side-step these, ASIC will not hesitate to use its powers to protect consumers."