The two businesses misled customers into taking out credit cards and paying additional fees in a 60-month interest-free payment scheme, the corporate regulator says.

The Federal Court has hit Harvey Norman with a $35 million penalty for running misleading ads – much more than the $20 million slapped on its partner company.

The two businesses misled customers into taking out credit cards and paying additional fees in a 60-month interest-free payment scheme, the corporate regulator says.