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HSBC's Australian Unit Fined AU$35 Million Over Scam Protection Failures

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The Australian Federal Court has ordered HSBC's (HKG:0005) Australian unit to pay a AU$35 million penalty after the lender admitted serious failures in protecting customers from scams, according to a statement on Thursday.

The court found HSBC did not implement key controls on its internal payment rail, where most customer losses occurred, while some other systems had controls.

HSBC has since established a remediation program that has paid approximately AU$21.5 million in compensation and recovered AU$6.5 million for customers, with further payments due by the end of July.

The Australian Securities and Investments Commission Chair, Sarah Court, described the penalty as "the strongest scam wake-up call yet to the banking industry."

HSBC didn't immediately reply to' request for comment.

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