HSBC Bank Australia has been ordered by the Federal Court to pay a A$35m ($24.5m) penalty after admitting significant shortcomings in its handling of scam risks affecting customers.
After a hearing in Melbourne, Justice Bennett directed the bank to place adverse publicity notices on its website, mobile app and in correspondence sent to affected customers.
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In a statement to Retail Banker International, the HSBC spokesperson said: “We apologise to our customers who were impacted by these events. We are pleased to have reached an agreement to resolve the proceedings with ASIC, which recognises our customer redress program and the significant enhancements made to our fraud and scam prevention, detection and response.”
In the court’s reasons, Justice Bennett said HSBC’s breaches were “serious” and found the agreed penalty to be within an appropriate range.
The court found that while HSBC had introduced scam protections across some payment channels, it had failed to put the main controls in place on the IAT payment rail, where most customer losses took place.
HSBC admitted breaches linked to the ePayments Code, including lengthy delays in examining scam complaints, which took an average of 144 days.
It further accepted that its systems were not sufficient to assist customers in regaining access to banking services after being scammed.
After ASIC’s investigation, HSBC set up a large-scale remediation programme that has so far delivered about A$21.5m in compensation, with additional payments due before the end of July 2026.
The bank has also recovered A$6.5m and returned that money to customers.
The remediation programme is intended to review affected customers and compensate those who were not responsible for losses under the ePayments Code, including for lost earnings caused by delayed access to funds.
In April, The Australian reported that HSBC revived a sale process linked to its Australian retail banking business, but the plan is now centred on offloading the loan portfolio rather than disposing of the entire operation at once.
