(Reuters) – Australia’s corporate regulator has taken legal action against global bank HSBC’s local subsidiary, saying it failed to respond properly to about 950 customer reports of losses of around $1 million or more.
The Australian Securities and Investments Commission (ASIC) alleged that HSBC took, on average, 145 days to investigate matters related to unauthorized payments and transactions.
ASIC added that between January 2020 and August 2024, HSBC Australia received those transaction reports, resulting in customer losses of approximately A$23 million ($14.61 million).
About A$16 million of these losses occurred between October 2023 and March 2024, it said.
The regulator said HSBC Australia did not have adequate controls to prevent and detect unauthorized payments, failed to investigate customer reports of unauthorized transactions promptly, and did not restore banking services in a timely manner.
The legal action comes at a time when Australian authorities, as well as banks, are doubling down on reducing the number of frauds occurring in the country’s banking industry.
About 265,000 bank-related frauds were reported in the 12 months to September 2024 in Australia, with a reported loss of about A$306.5 million in that period, according to data available on the Australian Banking Association’s website.
ASIC Deputy Chair Sarah Court said, “We suspect that the failure of HSBC Australia was widespread and systemic, and that the bank failed to protect its customers.”
ASIC is seeking infringement notices, fines, community injunctions and costs, it said in a statement.
“We are considering the issues raised and will continue to co-operate and work constructively with ASIC,” said an HSBC spokesperson while acknowledging ASIC’s comments.
($1 = 1.5738 Australian dollars)
