The Australian Securities and Investment Commission (Asic) is suing HSBC for failing to adequately protect customers scammed out of millions of dollars.
Asic alleges HSBC Australia failed to have adequate controls in place to prevent and detect unauthorised payments and failed to comply with its obligations to investigate customer reports of unauthorised transactions within the specified timeframes required, and to promptly reinstate their banking services in a timely manner.
The regulator alleges that there was a significant escalation in reports of unauthorised transactions by HSBC Australia customers from mid-2023 which often occurred after scammers had obtained access to their accounts by impersonating HSBC Australia staff.
Between January 2020 and August 2024, HSBC received approximately 950 reports of unauthorised transactions, resulting in customer losses of about $23 million. Almost $16 million of this occurred in the six months from October 2023 to March 2024.
Asic deputy chair Sarah Court says: "We allege HSBC Australia’s failings were widespread and systemic, and the bank failed to protect its customers.
"We allege HSBC Australia compounded the problem by failing to comply with its obligations under the ePayments Code and let its customers down when they needed their help the most, on average taking 145 days to investigate customers’ reports that they had been scammed.’
"We are also concerned that HSBC Australia failed to promptly restore customers’ full access to their bank accounts, on average taking 95 days to do so. One customer did not have full access restored for 542 days."
Asic is seeking declarations of contraventions, pecuniary penalties, adverse publicity orders, and costs.