(Reuters) -Australia's corporate regulator has launched legal action against the local subsidiary of global bank HSBC, alleging it failed to properly respond to around 950 reports from customers who lost nearly $1 million or more.
The Australian Securities and Investments Commission (ASIC) alleges that HSBC took, on average, 145 days to investigate matters relating to unauthorized payments and transactions.
ASIC added that between January 2020 and August 2024, HSBC Australia received those reports of the transactions, which resulted in losses to customers of approximately A$23 million ($14.61 million).
Almost A$16 million of these losses occurred between October 2023 and March 2024, it said.
The regulator claims HSBC Australia lacked adequate controls to prevent and detect unauthorized payments, failed to promptly investigate customer reports of unauthorized transactions and failed to restore banking services in a timely manner.
The legal action comes at a time when Australian authorities, as well as banks, have been redoubling efforts to reduce the number of scams occurring in the country's banking industry.
In the 12 months to September 2024, around 265,000 banking-related scams were reported in Australia, with a loss of around A$306.5 million reported in the period, according to data available on the website of the Australian Banking Association.
ASIC deputy chair Sarah Court said: “We allege that HSBC Australia's failings were widespread and systemic, and that the bank failed to protect its customers.”
ASIC is seeking declarations of contraventions, financial penalties, adverse publicity orders and costs, it said in the statement.
“We are considering the issues raised and will continue to cooperate and work constructively with ASIC,” an HSBC spokesperson said while acknowledging ASIC's claims.
($1 = 1.5738 Australian dollars)
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