HSBC’s Australian unit is facing a proposed A$35 million (US$24.6 million) penalty after admitting to serious shortcomings in its scam prevention and customer protection measures, according to Australia’s corporate regulator.
Reuters reported that the Australian Securities and Investments Commission (ASIC) said HSBC failed to maintain adequate controls over internal transfer systems between May 2023 and May 2024, exposing customers to a greater risk of unauthorised transactions.
The regulator also found the bank was aware of rising impersonation scams as early as 2021 but failed to take sufficient action.
ASIC said HSBC breached its financial services licence obligations by inadequately preventing scams, taking an average of 144 days to investigate customer complaints and lacking effective systems to help customers regain access to accounts locked following scam incidents.
ASIC and HSBC will jointly seek Federal Court approval for the proposed settlement, which would rank among the regulator’s most significant scam-related enforcement actions.
HSBC said it had agreed to resolve the proceedings, citing its customer compensation programme and substantial upgrades to its fraud and scam prevention, detection and response capabilities. The proposed penalty remains subject to court approval.
