UK-based banking group HSBC Holdings PLC (GB:HSBA) is facing a lawsuit from the Australian regulator over its failure to protect customers from scams. The Australian Securities and Investments Commission (ASIC), reported that between January 2020 and August 2024, HSBC Australia received around 950 reports of unauthorized transactions. Notably, scammers stole AU$23 million ($14.6 million) from customers of HSBC Australia during this time. HSBC shares in London gained 0.12% as of writing.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
HSBC Holdings is a global bank that serves approximately 42 million customers globally. The bank operates in over 60 countries worldwide.
HSBC Fails to Prevent Scams in Australia
ASIC accused HSBC Australia of failing to properly detect unauthorized transactions by scammers posing as bank employees. It further stated that the bank lacked sufficient measures to prevent unauthorized payments.
Additionally, the regulator claims that the bank failed to investigate customer reports of fraud promptly or restore banking services as required. HSBC Australia took an average of 145 days to investigate scam reports and 95 days to restore full access to customer accounts. In one extreme case, a customer reportedly waited 542 days for the account access to be fully reinstated. Notably, some customers lost more than AU$90,000.
As part of this lawsuit, ASIC is asking the court to declare that HSBC Australia violated the law, impose financial penalties, issue adverse publicity orders, and cover legal costs.
HSBC has faced multiple penalties from regulators in recent years. In January 2024, HSBC was fined $73 million by the UK’s Prudential Regulation Authority for not properly protecting customer deposits. Later in May, the Financial Conduct Authority (FCA) also fined HSBC UK Bank £6.28 million for improperly handling customers facing financial difficulties.
Is HSBC a Good Stock to Buy?
Overall, HSBA stock has received a Moderate Buy consensus rating on TipRanks based on a total of eight recommendations. It includes three Buy and five Hold ratings from analysts. The HSBC share price target is 770.69p, which is almost similar to the current trading level.
Year-to-date, HSBC shares have gained 22%.
