The Australian Securities and Investments Commission (ASIC) said on Thursday that it is seeking a fine of A$35 million (US$24.6 million) from UK major bank HSBC Holdings' Australian subsidiary after it admitted to "serious failures in protecting customers from scams" that cost some their life savings.
Following ASIC's investigation, HSBC Bank Australia Limited has also established a large-scale remediation programme.
In a statement, the ASIC said HSBC has admitted that it failed to do all things necessary to ensure that its financial services and credit activities were provided efficiently, honestly and fairly. The failures are said to have cost customers some tens of thousands of dollars, including their life savings.
ASIC commenced civil penalty proceedings against HSBC Bank Australia on December 13, 2024.
ASIC and HSBC Bank Australia plans to ask the Federal Court to find HSBC contravened the law and impose the $35 million penalty.
The proposed resolution is subject to the approval of the court. ASIC noted that it is a matter for the court to determine whether the proposed orders are appropriate and whether any other orders should be made.
So far, HSBC has paid around $21.5 million in compensation, with further payments to come. The bank has also recovered $6.5 million and returned those funds to customers.
HSBC, between January 2020 and August 2024, had received more than 1,000 reports of unauthorized transactions with a total transaction value of $34.6 million.
ASIC Chair Sarah Court said, "This is one of the first cases of its kind globally and sends a clear message that protecting customers from scams is a core responsibility of banks. HSBC's alleged failures left customers more vulnerable to scams, tens of millions of dollars out of pocket and waiting months to find out what had happened to their money."
