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(Sharecast News) - HSBC has been fined AUD $35m after admitting it failed to protect Australian customers from being scammed out of their life savings.
The Australian Securities and Investments Commission (Asic) started legal action in 2024 alleging "widespread and systemic failures" by the UK based bank.
HSBC had initially indicated it would contest the action, but instead accepted it was at fault. Asic said the bank's internal systems had inadequate controls and that it failed to respond to customer complaints in a timely manner.
"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," said the regulator's chair Sarah Court.
"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."
The said it had paid AUD $28mn in refunds and compensation. Examples of scammed victim losses included a 51-year-old dental technician who lost AUD $47,000, which was almost all her life savings; $50,000 by a 25-year-old architectural assistant; a couple in their 50s who had $48,000 taken out of their home loan account; and a 41-year-old who lost $50,000.
It is not the first time that HSBC has been hit a major fine over its behaviour. In January 2024, the Bank of England slapped it with a 57.4m penalty for failing to protect customers' deposits and in 2021 it coughed up 64m, again in the UK, for weak anti-money laundering controls.
In May 2024 it was fined 6.3m for disproportionate treatment of loan customers who had fallen into arrears.
But its biggest payout was a massive $1.9bn fine in 2012 to US authorities for failing to maintain effective anti-money laundering programs, allowing Mexican and Colombian cartels to launder hundreds of millions of dollars.
This was around the same time as the bank was threatening to relocate its UK headquarters in protest over banking levies and plans at the time to split the breaking up big players in the sector.
Reporting by Frank Prenesti for Sharecast.com
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