Australia’s markets regulator has sued HSBC for its alleged failure to protect customers from scams resulting in multi-million dollar losses.
The Australian Securities and Investments Commission (ASIC) has sued HSBC Australia in a federal court, accusing it of failing to protect customers from scams, according to a statement.
«ASIC alleges HSBC Australia failed to have adequate controls in place to prevent and detect unauthorized payments and failed to comply with its obligations to investigate customer reports of unauthorized transactions within the specified timeframes required, and to promptly reinstate their banking services in a timely manner,» the regulator said.
950 Reports
The accusations are related to 950 reports of unauthorized transactions that HSBC Australia received between January 2020 and August 2024 which resulted in customer losses of approximately A$23 million ($15 million). Nearly A$16 million of losses occurred from October 2023 to March 2024. These transactions often occurred after scammers obtained access to accounts by impersonating bank staff. Some customers were scammed out of A$90,000 or more.
When customers reported that they were scammed, the bank took an average of 145 days to investigate. And on reinstating banking services, the bank took an average of 95 days to do so with one customer waiting 542 days before having access fully restored.
«All banks need to pull their weight in the fight against scams. We will not hesitate to take court action where we consider banks fail to comply with their obligations to protect their customers,» said ASIC deputy chair Sarah Court, adding that the regulator is seeking declarations of contraventions, pecuniary penalties, adverse publicity orders and costs.
