ASIC’s $35M HSBC Fine Leaves Scam Victims in Limbo
Synopsis
HSBC customers caught up in sophisticated spoofing scams are still waiting for answers on compensation, despite ASIC securing a $35 million penalty against the bank over failures in fraud prevention and customer protection.
The Federal Court has fined HSBC Australia $35 million for its failure to sufficiently respond to scam-related fraud and unauthorized transactions, with many victims still awaiting the full repayment of their lost funds.
ASIC brought proceedings against the bank for failing to adequately handle more than 1,000 reports of disputed transactions, totalling roughly $34.6 million, between January 2020 and August 2024.
The court found HSBC Australia's anti-fraud processes, security controls, and consumer protections were substandard over the period.
Customers Wait Still out of Pocket
Although HSBC Australia has begun to compensate customers for its failures, those targeted by sophisticated scams are still significantly down their savings, some with large portions of their life savings still not recovered.
The bank has reimbursed a total of about $21.5 million for its losses and recovered about $6.5 million in stolen funds, though many cases still remain under review.
Much of the issues were centred around spoofing scams, where criminals impersonate phone calls or text messages, looking like legitimate HSBC contacts, which would persuade unsuspecting customers to hand over personal information or send money to fake bank accounts.
Delays Highlighted by Federal Court the centre of the investigation into HSBC Australia focused on delays in dispute investigation, for unauthorized electronic transactions under the ePayments Code, Banks must generally complete their investigation within 21 days.
The HSBC Australia cases, however, saw banks taking on average 144 days to complete investigations.
ASIC stated that the failings exposed deficiencies in HSBC’s ability to effectively deal with reports of scams and implement adequate protections.
Banking Sector Faces Growing Scam Pressure
The recent ruling is among a number of actions and initiatives aimed at combating the growing problem of scams across Australia's banking and finance sectors. As a result of the ePayments Code, many Australians remain susceptible to these scams.
Australians have reported $2.03 billion in scam losses in 2024 so far, with investment scams and impersonation scams remaining significant sources of fraud, according to Australia's anti-scam body, the National Anti-Scam Centre.
Wider Cooperation on scams The Australian, UK, and Singaporean governments have all taken measures this year to collaborate with telcos, banks, and tech companies to target scammers.
These efforts come after the UK implemented mandatory reimbursements for authorised push payment scams and Singapore strengthened regulations for shared responsibility between financial institutions and their customers.
HSBC Holdings plc, the parent company of HSBC Australia, posted a profit before tax of $32.3 billion and revenues of $65.9 billion for the 2024 fiscal year, based on its Annual Report.
Source: Capital Brief
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Pooja Malik is a business journalist with over six years of experience covering startups, entrepreneurship, and emerging trends. She has previously worked with leading media platforms such as YourStory Media and BW BusinessWorld, where she reported on business, policy, and market developments. Currently, she serves as Editor at The Inspirepreneur Magazine, where she writes and edits stories across business, lifestyle, and travel, with a focus on clarity, accuracy, and reader relevance.
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