Australia sues HSBC for neglect of fraud victims

SYDNEY. Australia’s corporate regulator has launched legal action against a local branch of global bank HSBC, alleging it failed to respond properly to about 950 reports that customers lost about a million dollars or more.

The Australian Securities and Investments Commission (Asic) said HSBC took an average of 145 days to deal with issues related to unauthorized payments and transactions.

Asik added that between January 2020 and August 2024, HSBC Australia received these transaction reports that resulted in customers losing about A$23 million (S$19.71 million).

Almost A$16 million of those losses occurred between October 2023 and March 2024, it said.

The regulator alleges that HSBC Australia did not have sufficient controls 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 lawsuit comes as Australian authorities and banks double down on fraud in the country’s banking industry.

According to data available on the Australian Banking Association’s website, in the 12 months to September 2024 there were about 265,000 bank fraud incidents in Australia, with a loss of about A$306.5 million over the period.

Asic deputy chair Sarah Court said: “We submit that HSBC Australia’s failures were widespread and systemic and the bank failed to protect its customers.”

Asic is seeking a declaration of infringement, monetary penalties, adverse publicity orders and costs, the statement said.

“We are reviewing the issues raised and will continue to co-operate and work constructively with Asic,” an HSBC spokesman said, acknowledging ASIC’s claims. Reuters

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