HSBC fought customers 'tooth and nail' over scam but now it's fronting court

Sunni Wan lost almost $50,000 after responding to a text message scam in which fraudsters impersonated the bank. (ABC News: Billy Cooper) HSBC customers who became victims of a long-running "spoofing" scam hope the bank will take full responsibility for its "system failures" in Federal Court this week. The bank will face a hearing and is expected to admit it failed customers in a statement of agreed facts. Customers are hoping for a full refund, including compensation, while consumer groups hope the bank will be heavily penalised. Link copiedShareShare articleFraud victims are anxiously waiting to see if global bank HSBC will admit to the Federal Court that it failed to protect its customers from a long-running spoofing scam, potentially paving the way for a massive financial penalty. Hundreds of Australians were scammed out of huge sums of money over four years, where fraudsters used text messages to trick people into thinking their accounts had been compromised. While the bank has fully reimbursed some, others settled for much less and victims want the bank to repay outstanding losses and compensation. Defrauded customers have been waiting for HSBC's day in court, after it was sued by the Australian Securities and Investments Commission (ASIC) in 2024. The lawsuit is the first in Australia attempting to hold a bank to account for allegedly having inadequate processes to detect and prevent scam losses. (ABC News: Billy Cooper) Sunni Wan lost nearly $50,000 after responding to a "spoofing" text message from someone impersonating the bank. When the Sydney woman discovered there were many others facing massive losses, she created a support group to fight HSBC for reimbursement. "They just kept putting the blame on the victims," she said. HSBC is being sued by ASIC over allegations of "widespread and systemic" failures to protect customers. Australians are continuing to lose their life savings to a long-running "spoofing" scam targeting customers of banking giant HSBC. Customers made 950 reports alleging scammers had netted $23 million, between January 2020 to August 2024, in the bank impersonation scam. The lawsuit is the first of its kind in Australia, attempting to hold a bank to account for allegedly having inadequate processes to detect and prevent scam losses. It's also alleging the bank was too slow to investigate complaints, and customers were locked out of their accounts for too long — in one case, 542 days. HSBC had planned to defend the case at trial, but it was abandoned when the bank said it would no longer contest it. Today in Melbourne, HSBC will front a Federal Court hearing where it is expected the bank will admit it failed customers in a statement of agreed facts. Stephanie Tonkin says HSBC needs to be shown its conduct is entirely unacceptable. (ABC News: Billy Draper) Stephanie Tonkin, CEO of the Consumer Action Law Centre, said it was a stunning turn-around. "HSBC has fought tooth and nail, fought against its customers, fought against the regulator," she said. "These scam victims were gaslit by their own bank. "The same failures kept happening and the bank still kept failing to prevent it." The corporate watchdog is expected to request the court hit the bank with a substantial financial penalty. Ms Tonkin said the penalty needed to send a message. Court documents show customers lost more than $100 million in all fraud-related losses between 2021 and 2024. (ABC News: Billy Cooper) "HSBC needs to be shown that its conduct is entirely unacceptable and can never happen again," she said. "So, a penalty in the hundreds of millions of dollars." HSBC declined an interview request and said it was unable to comment while the case was ongoing. Advocates say internal documents provide a concerning insight into what was happening inside HSBC during that time, including warnings that appear to have gone unheeded. Court documents show customers lost more than $100 million to all payment fraud-related losses between 2021 and 2024. Those losses accelerated to almost $61 million between January and September 2024, with $24 million related to impersonation scams. Not all of these losses are covered by the Federal Court case. ASIC has alleged there were missed opportunities inside the bank, including that HSBC's internal controls weren't up to scratch to identify suspicious activity across mobile and online banking. In 2021, the bank was told about "fraudsters" impersonating the bank. A fraud steering committee heard in early 2022, that if it had in place specific fraud prevention products to monitor transactions, "losses resulting from these scam cases … would likely have been avoided". Midway through 2023, a special presentation was given about the "HSBC Impersonation Scam". It heard customers had made over 150 unusual activity reports and one group behind the scam was even using a HSBC Australia "mule account" to shift stolen funds to Pakistan. A money mule account is

HSBC fought customers 'tooth and nail' over scam but now it's fronting court

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