source : the age
After years of blaming devastated scam victims, global banking giant HSBC has suddenly changed course and will no longer fight claims its widespread and systemic failures allowed criminals to fleece its Australian customers of tens of millions of dollars.
Australia’s corporate regulator sued the local subsidiary of one of the world’s largest financial institutions for failing to introduce adequate scam protections, even in the face of repeated warnings from its own fraud experts over many years.
HSBC’s Australian customers lost more than $100 million to scams from 2021 to 2024, according to court documents. Many were victims of a sophisticated bank impersonation scam, where criminals impersonated HSBC bank employees and sent text messages that appeared to come from HSBC.
The bank has consistently denied it did anything wrong, instead often presenting scam victims with the findings of “fraud investigations” that, rather than investigating the crime, outlined why the customer was solely to blame for the losses.
This week, less than two months before the scheduled trial date, HSBC said it would no longer defend the case brought by the Australian Securities and Investments Commission. The 12-day trial scheduled for mid-June has been cancelled, and replaced by a one-day hearing the same month.
ASIC had been pushing for HSBC to be penalised with fines and adverse publicity orders.
On Wednesday, the regulator and bank wouldn’t comment on any proposed settlement.
Any resolution would need to be approved from Federal Court Justice Elizabeth Bennett in a hearing scheduled for June 18.
HSBC was facing claims that more customers than previously thought had been affected by scams.
An amended statement of claim filed by ASIC in March increased the number of reports of unauthorised transactions made between January 2020 and August 2024 from 950 to 1022.
ASIC had previously claimed via court documents that HSBC knew it had gaps in its fraud-control systems but failed to fix them.
The court documents show that in March 2021, HSBC bank staff noted in a presentation on its fraud-mitigation strategy that HSBC Australia had “no real-time interception or payment-holding to clarify suspicious transaction content with customer[s]” and that it would cost $380,000 to set up that sort of payment interception.
HSBC would not say whether it would provide direct compensation or an apology to affected customers. “HSBC and ASIC are working to resolve the legal proceedings in relation to frauds and scams,” a spokesperson said.
A similar statement was issued by ASIC. “The parties have been working toward an agreed outcome in this matter,” an ASIC spokesperson said. “The ultimate outcome will be a matter for the judge.”
More to come.
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