HSBC’s Australian banking division has been ordered to pay a penalty of A$35 million (US$24.6 million) after admitting serious failures in protecting customers from scams and unauthorized transactions.
The ruling was handed down by Australia’s Federal Court following action by the Australian Securities and Investments Commission (ASIC).
According to ASIC, HSBC failed to maintain adequate controls over its internal transfer systems between 2023 and 2024, leaving customers vulnerable to fraud.
The regulator also said the bank was aware of the growing threat of impersonation scams, in which fraudsters posed as HSBC representatives to deceive customers.
Investigations found that the bank took an average of 144 days to handle scam-related complaints and lacked effective systems to help customers regain access to accounts that had been locked following fraudulent activity.
ASIC described the case as one of the most significant actions taken against a bank for scam protection failures.
HSBC said it had reached an agreement with the regulator, highlighting the compensation already provided to affected customers and the improvements made to its fraud prevention and detection systems.
The case is being viewed as a landmark moment for the banking industry and a reminder of the growing responsibility financial institutions have in protecting customers from increasingly sophisticated scams.
