HomeCyber Security NewsHSBC Australia Accused of Failing to Protect Customers from Scams

HSBC Australia Accused of Failing to Protect Customers from Scams

ASIC Takes HSBC Australia to Court Over Alleged Systemic Failings

HSBC Bank Australia Limited (HSBC Australia) is under scrutiny after the Australian Securities and Investments Commission (ASIC) filed legal proceedings, accusing the bank of failing to safeguard customers against scams. Documents lodged in the Federal Court allege HSBC Australia lacked adequate controls to prevent and detect unauthorised payments and failed to investigate customer complaints within required timeframes.

Reports of unauthorised transactions surged from mid-2023, often involving scammers impersonating HSBC staff to gain access to accounts. Between January 2020 and August 2024, HSBC received approximately 950 reports of unauthorised transactions, leading to losses of $23 million. Of this, $16 million was lost in just six months between October 2023 and March 2024.

ASIC Deputy Chair Sarah Court stated, “We allege HSBC Australia’s failings were widespread and systemic, leaving customers vulnerable to significant financial harm.” The watchdog also claims the bank violated the ePayments Code by taking an average of 145 days to investigate unauthorised transactions and 95 days to restore customer account access, with one case taking a staggering 542 days.

ASIC alleges HSBC breached its obligations under the Corporations Act 2001 and the National Consumer Credit Protection Act 2009 by not providing services efficiently, honestly, and fairly. It seeks penalties, declarations, and adverse publicity orders against the bank.

A Growing Scam Crisis in Australia

Scams remain a major issue in Australia, with the ACCC reporting losses of $2.74 billion in 2023. HSBC is among the banks facing scrutiny as new legislation, introduced in November 2024, aims to strengthen the fight against scams by mandating preventative measures across various sectors.

ASIC emphasizes that consumers should remain vigilant. Resources for scam protection and recovery are available on Scamwatch and ASIC’s Moneysmart website.

What Customers Can Do

Customers are encouraged to regularly monitor their accounts, report any suspicious activity immediately, and take advantage of resources on scamwatch.gov.au. Banks, too, are urged to prioritize robust fraud prevention measures to protect their customers.

asic.gov.au

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