Australia’s markets watchdog sued HSBC Bank of Australia Ltd for failing to protect clients who lost millions of dollars in scams.
HSBC received about 950 reports of unauthorized transactions between January 2020 and August this year, resulting in customer losses of about A$23 million (US$14.61 million), an Australian Securities and Investments Commission (ASIC) statement released yesterday said.
About A$16 million of this occurred in the six months from October last year to March, the statement said.
Photo: Reuters
“ASIC alleges HSBC Australia failed to have adequate controls in place to prevent and detect unauthorized payments and failed to comply with its obligations to investigate customer reports of unauthorized transactions within the specified time frames required, and to promptly reinstate their banking services in a timely manner,” the statement said.
The bank on average took 145 days to investigate client reports that they had been scammed, it said, adding that HSBC Australia’s failings were widespread and systemic.
“We are considering the matters raised and will continue to co-operate and work constructively with ASIC,” a spokesperson for HSBC said in an email. “Protecting our customers from scammers remains a top priority. We continue to make significant investments in our fraud and scam prevention, detection and response.”
Separately, Entain PLC, the gambling company that owns Ladbrokes, said that Australia’s anti-money laundering regulator had opened civil penalty proceedings against the group’s local subsidiary following a two-year investigation.
A fine as a result of the federal court case could be “potentially material” and the company is carefully considering the Australian Transaction Reports and Analysis Centre’s filings, Entain said in a statement.
The regulator announced the probe, looking at whether the company had broken laws requiring it to identify and stop money laundering and terrorist financing on its platform, into Entain’s Australian unit in September 2022.
“We are committed to keeping financial crime out of gambling and continue to play our part in supporting a well-regulated and compliant sector for our customers, stakeholders and the wider community,” Entain chief executive officer Gavin Isaacs said in the statement.
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