HSBC has agreed to pay a A$35 million (US$24.6 million) fine after admitting to significant failures in protecting Australian customers from scams, marking a rare enforcement action by the Australian Securities and Investments Commission (ASIC). The penalty resolves legal proceedings initiated by ASIC, which had alleged “widespread and systemic” shortcomings in the bank’s controls to prevent fraud.

The UK-headquartered bank acknowledged serious deficiencies in its internal systems and its failure to adequately respond to customer complaints in a timely manner. ASIC chair Sarah Court emphasized that the case underscores banks’ core responsibility to shield customers from scams. She noted that HSBC’s lapses exposed customers to substantial financial harm, with victims losing tens of millions of dollars and enduring months of uncertainty regarding their funds.

HSBC issued an apology to affected customers and confirmed it had already paid A$28 million in refunds and compensation. The bank welcomed the resolution, highlighting the improvements made to its fraud prevention, detection, and response measures, as well as its customer redress efforts.

The case follows a pattern of regulatory scrutiny for HSBC. In January 2024, the Bank of England fined HSBC £57.4 million for shortcomings in safeguarding customer deposits. The bank also faced a £64 million penalty in 2021 in the UK over deficiencies in anti-money laundering controls.

The vulnerabilities exploited in Australia were largely linked to “spoofing” scams, where victims received fraudulent text messages impersonating HSBC and were tricked into divulging sensitive banking details. ASIC reported that authorized transactions at HSBC linked to scams jumped by 380 percent between early 2023 and the end of 2024, driven primarily by impersonation fraud.

The resolution with ASIC marks one of the first instances globally where a major bank has accepted responsibility and a financial penalty for failing to protect customers from scams, reinforcing growing regulatory demands for stronger protections against financial crime in the banking sector.