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Mia Castagnone

HSBC’s Australian unit is being sued by the country’s securities watchdog agency for failing to protect local customers from scams, resulting in A$23 million (US$14.65 million) of losses.
The Australian Securities and Investment Commission (ASIC) lodged a claim against HSBC Bank Australia in the Australian federal court on Monday in relation to 950 reports totalling A$23 million over a five-year period from January 2020 to August 2024.
Scams have picked up in recent years, as nearly 70 per cent of the claims, totalling A$16 million, occurred in the six months from October 2023 to March 2024.
ASIC is among the global regulators that are grappling with ways to stamp out online scams, hoaxes and cybercrime. Australian banks have the legal obligation to protect the personal information of their customers, even though there is no law that mandates how banks should act in relation to fraud.

HSBC Australia failed to have adequate controls in place to prevent and detect unauthorised payments and failed to comply with its obligations to investigate customer reports of unauthorised transactions and to promptly reinstate customers banking services in a timely manner, according to ASIC.
The bank took 145 days to investigate some of the reports and 95 days to unlock some accounts, with one customer waiting 542 days to regain access to an account, ASIC said. Local codes of conduct require HSBC to complete an investigation into a report of an unauthorised transaction within 21 days, and within 45 days in exceptional circumstances.
“All banks need to pull their weight in the fight against scams,” ASIC’s deputy chair Sarah Court said in a statement, adding that the bank’s failings were “widespread and systematic” in the industry.
“We will not hesitate to take court action where we consider banks failing to comply with their obligations to protect their customers,” said Court.
It is the first time the watchdog has held a financial institution accountable for the widespread complaints.
ASIC is seeking “significant penalties”, Court added, and hopes the case will send a message to HSBC and to the broader banking sector to “take these obligations very seriously.”
HSBC acknowledged the claim made by ASIC and said it would be “considering the matters raised and will continue to cooperate and work constructively” with the watchdog.
“Protecting our customers from scammers remains our top priority,” an HSBC spokesperson said on Monday. “We continue to make significant investments in our fraud and scam prevention, detection, and response.”
Fraudsters tricked customers by using software to send out text messages to customers that appeared to be from HSBC. The ‘spoofing’ scam also used calls that appeared to be from the bank.
Such scams resulted in Australian customers losing some A$2.74 billion in 2023 alone, according to local government data. Scam and fraud cases have similarly surged in Hong Kong.
Complaints related to Authorised Push Payment fraud jumped 16 per cent in the first six months of the year, according to the Hong Kong Monetary Authority, while financial losses from cybercrime cases rose 31 per cent to HK$2.66 billion (US$342 million), according to police data.
The figures have prompted the city’s authorities to launch an industry consultation on scams, paving the way for commercial banks to share losses with customers affected by such transactions.
In Singapore the government has also been prompted to take steps to protect individuals from scams. Its government proposed a law in November that would empower police officers to freeze the bank accounts of individuals believed to have fallen victim to scams.


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The Australian Securities and Investment Commission (ASIC) lodged a claim against HSBC Bank Australia in relation to 950 reports totalling A$23 million.


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Australian regulator takes HSBC’s unit to task for failing to protect customers from scams

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}The Australian Securities and Investment Commission (ASIC) lodged a claim against HSBC Bank Australia in relation to 950 reports totalling A$23 million.

The Australian Securities and Investment Commission (ASIC) lodged a claim against HSBC Bank Australia in relation to 950 reports totalling A$23 million.