Australia sues HSBC for neglect of fraud victims

Australia’s corporate regulator has initiated legal action against a local branch of a global bank HSBCclaiming it failed to properly respond to about 950 reports that customers had lost about a million dollars or more.
Australian Securities and Investments Commission (ASIC) claims that HSBC took an average of 145 days to resolve issues related to unauthorized payments and transactions.
ASIC added that between January 2020 and August 2024, HSBC Australia received these transaction reports, which resulted in customer losses of about A$23 million ($14.61 million).
Almost A$16 million of those losses occurred between October 2023 and March 2024, it said.
The regulator says HSBC Australia did not have sufficient controls to prevent and detect unauthorized payments, failed to investigate customer reports of unauthorized operations promptly and did not restore banking services on time.
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 infringement notices, monetary penalties, adverse public injunctions and costs, it said in a statement.
“We are reviewing the issues raised and will continue to co-operate and work constructively with ASIC,” an HSBC spokesman said, acknowledging ASIC’s submissions.
($1 = 1.5738 Australian dollars)