(Reuters) – Australia's corporate regulator has launched legal proceedings against the local affiliate of global bank HSBC, saying it failed to respond properly to around 950 reports of customers losing nearly a million a dollar or more.
The Australian Securities and Investments Commission (ASIC) claims that HSBC took, on average, 145 days to investigate issues related to unauthorized payments and transactions.
ASIC said that between January 2020 and August 2024, HSBC Australia received these reports about the transactions, resulting in customer losses of approximately A$23 million ($14.61 million).
Nearly $16 million of those losses occurred between October 2023 and March 2024, he said.
The regulator claims HSBC Australia did not have adequate controls to prevent and detect unauthorized payments, failed to promptly investigate customer reports of unauthorized transactions, and failed to restore banking services there the good time.
The legal action comes at a time when the Australian authorities, as well as banks have been doubling down on reducing the number of scams that occur in the country's banking industry.
Around 265,000 banking-related scams were reported in the 12 months to September 2024 in Australia, with around A$306.5 million reported lost in the period, according to data available on a website Australian Banking Association.
ASIC Deputy Chair Sarah Court said, “We allege HSBC Australia's failures were widespread and systemic, and the bank failed to protect its customers.”
ASIC is seeking proof of infringements, fines, adverse advertising orders and costs, it said in the statement.
“We are considering the issues raised and will continue to co-operate and work constructively with ASIC,” said an HSBC spokesman acknowledging ASIC's claims.
($1 = 1.5738 Australian dollars)
(Reporting by Adwitiya Srivastava in Bengaluru; Additional reporting by Roshan Thomas; Editing by Diane Craft and Lisa Shumaker)
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