On Monday the Australian Securities and Investments Commission (ASIC) said it has launched legal action against HSBC Bank Australia. The regulator alleges widespread failures in protecting customers from scams.
ASIC Sues HSBC Australia for Failure to Protect Customers From Scams
ASIC argues the bank did not have adequate controls in place to prevent or detect unauthorised payments and failed to investigate scam reports within the specified timeframes required.
HSBC customers are said to have lost approximately $23 million due to unauthorised transactions between January 2020 and August 2024, with $16 million occurring in just six months, from October 2023 to March 2024.
Many cases reportedly involved scammers impersonating HSBC staff to gain access to customer accounts.
“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,” said Sarah Court, ASIC Deputy Chair.
ASIC added that HSBC took an average of 145 days to investigate scam reports and 95 days to restore customer accounts.
In one instance, ASIC said a customer waited 542 days to regain full access.
The regulator adds that HSBC breached its obligations under the ePayments Code and Australian laws by failing to provide financial services “efficiently, honestly, and fairly.”
“ASIC is seeking declarations of contraventions, pecuniary penalties, adverse publicity orders, and costs,” stated the regulator.
ASIC said in its press release that scams cost Australians $2.74 billion in 2023.
