SYDNEY: Australia's corporate regulator has initiated legal action against the local affiliate of the global bank HSBC, claiming it failed to correctly respond to about 950 reports of customers losing close to a million dollars or more.
The Australian Securities and Investments Commission (ASIC) is alleging HSBC took, on average, 145 days to look into matters related to unauthorised payments and transactions.
ASIC added that between January 2020 and August 2024, HSBC Australia received those reports of the transactions, resulting in customer losses of about A$23 million (US$14.61 million).
Almost A$16 million of these losses occurred between October 2023 and March 2024, it said.
The regulatory body claims that HSBC Australia lacked adequate controls to prevent and detect unauthorised payments, failed to investigate customer reports of unauthorized transactions promptly, and did not reinstate banking services in a timely manner.
The legal action comes at a time when Australian authorities, as well as banks have been doubling down on reducing the number of scams occurring in the country's banking industry.
About 265,000 banking-related scams were reported in the 12 months to September 2024 in Australia, with about A$306.5 million reported lost in the period, according to data available on the Australian Banking Association's website.
ASIC Deputy Chair Sarah Court stated, "We allege HSBC Australia's failings were widespread and systemic, and the bank failed to protect its customers."
ASIC is seeking declarations of contraventions, pecuniary penalties, adverse publicity orders, and costs, it said in the statement.
"We are considering the matters raised and will continue to co-operate and work constructively with ASIC," an HSBC spokesperson said while acknowledging ASIC's claims. - Reuters
