Australia’s consumer watchdog sues HSBC Australia for allegedly failing to protect consumers from scammers

The Australian Securities and Investment Commission (ASIC) is suing HSBC Australia for allegedly failing to ‘adequately protect customers scammed out of millions of dollars’.

The corporate regulator claims the bank did not have sufficient controls in place to prevent and detect unauthorized payments and failed to comply with obligations to investigate customer reports of unauthorized transactions within required timeframes.
In the period between January 2020 and August 2024, HSBC received some 950 reports of unauthorized transactions, causing customer losses of about AU$23 million ($14.65 million). Nearly AU$16 million ($10.2 million) of this was from the period between October 2023 and March 2024.
“We know scammers are constantly looking for new ways to exploit people. Customers can lose their life savings in an instant. Scammers do not discriminate,” stated ASIC Deputy Chair Sarah Court.
“We allege that from at least January 2023, HSBC Australia was aware of the risks of unauthorized transactions occurring and that there were gaps in their fraud controls,” noted Court.
“We will not hesitate to take court action where we consider banks fail to comply with their obligations to protect their customers,” furthered the official.
ASIC says that it is now ‘seeking declarations of contraventions, pecuniary penalties, adverse publicity orders, and costs’.
While scamming activities come in various forms, many have been linked to online gambling and cryptocurrency.

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