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The Australian Securities and Investments Commission (ASIC) is suing banking giant HSBC, alleging it failed to protect 950 Australian customers who collectively lost millions of dollars to fraud.
In a statement released on Monday, the corporate watchdog said the total losses amounted to $23 million over a five-year period from January 2020. until August 2024
Described as “widespread and systemic” by ASIC deputy chairman Sarah Court, nearly $16 million of the losses occurred in just six months, between October 2023. and March 2024.
“We claim that at least from January 2023. HSBC Australia was aware of the risks of unauthorized transactions occurring and that there were gaps in their anti-fraud controls. This has resulted in some customers being defrauded of $90,000 or more,” Court said.
ASIC alleged that HSBC failed to prevent and detect unauthorized payments or promptly investigate customer reports of unauthorized transactions.
On average, it took the bank 145 days, almost five months, to complete an investigation and 95 days to fully restore customers’ access to their bank accounts.
In one case, a customer waited 542 days to regain full access.
Many frauds occurred after fraudsters gained access to accounts posing as HSBC Australia staff from around mid-2023.
“We know that fraudsters are constantly looking for new ways to exploit people. Customers can lose their savings in an instant. Scammers don’t discriminate,” Court said.
“All banks must fight fraud. We will not hesitate to take legal action when we believe that banks are not meeting their obligations to protect their customers.
The announcement follows an ASIC investigation which found that HSBC had been slow to respond to fraudsters.
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