(Reuters) – Australia’s corporate regulator has taken legal action against the local branch of global bank HSBC, claiming it failed to properly respond to about 950 reports from customers who lost nearly $1 million or more.
The Australian Securities and Investments Commission (ASIC) claims HSBC took an average of 145 days to investigate cases involving unauthorized payments and transactions.
ASIC added that HSBC Australia received these reports of the transactions between January 2020 and August 2024, resulting in customer losses of approximately A$23 million ($14.61 million).
Nearly A$16 million of these losses occurred between October 2023 and March 2024, the report said.
The regulator alleges that HSBC Australia did not have adequate controls in place to prevent and detect unauthorized payments, failed to promptly investigate customer reports of unauthorized transactions and failed to restore banking services in a timely manner.
The legal action comes as Australian authorities and banks have redoubled efforts to reduce the number of scams in the country’s banking sector.
About 265,000 banking-related scams were reported in Australia in the 12 months to September 2024, with about A$306.5 million lost in the period, according to data available on the Australian Banking Association website.
ASIC deputy chair Sarah Court said: “We allege that HSBC Australia’s failings were widespread and systemic, and that the bank failed to protect its customers.”
ASIC is seeking declarations of offences, fines, adverse publicity orders and costs, the statement said.
“We are considering the matters raised and will continue to engage and engage constructively with ASIC,” an HSBC spokesperson said, while acknowledging ASIC’s claims.
($1 = 1.5738 Australian dollars)
(Reporting by Adwitiya Srivastava in Bengaluru; Additional reporting by Roshan Thomas; Editing by Diane Craft and Lisa Shumaker)
