‘Losses will continue to mount': Bank staff's security warnings before massive scam cost customers millions
'[C]urrently, HSBC do not have the capability to stop an online transfer of funds from one bank account to another,' said another presentation given in October 2022 to HSBC's Australian wealth and personal banking fraud steering committee.
By July 2023, the court documents show that Matthew Hannan, HSBC Australia's head of fraud management, was making a 'special' presentation about an 'HSBC impersonation scam' in which he had said that 50 customers had lost money in the emerging scam, sometimes after receiving text messages that tricked them into sharing personal information.
In September the same year, a slide pack for an HSBC Australia committee meeting discussing impersonation scams said that 'current limitations on desktop banking monitoring and real-time interception are impacting our ability to disrupt and prevent these attacks'.
ASIC alleges that HSBC Australia didn't implement adequate real-time fraud payment monitoring, including capabilities to detect and block suspicious activity, across both mobile and online banking until about May 2024, at the tail end of the swindle.
The corporate regulator also highlighted other alleged security deficiencies, claiming HSBC did not implement a digital fraud behavioral biometric system called BioCatch, and digital fraud device identification capabilities, via ThreatMetrix, for online banking until June 2024.
In January 2022, the minutes of one of the bank's fraud steering committee meetings noted that 'losses resulting from these scam cases and determinations would likely have been avoided with BioCatch/ThreatMetrix implementation for transactional monitoring'.
In December 2023, as the reports from the impersonation scam mounted, another internal presentation warned that until these systems were implemented for online banking, the fraud team 'cannot disrupt scams, and losses will continue to mount'.
HSBC Australia customers lost $18 million via impersonation scams in the 2023 financial year, and $24 million in the first nine months of 2024, according to court documents. About 950 reports of unauthorised transactions were made to HSBC Australia between January 2020 to August last year.
HSBC was due to file its defence in the case early last month, but failed to do so. At a hearing in May, Justice Elizabeth Bennett ordered the bank to provide a written explanation of their non-compliance.
A solicitor acting for HSBC Australia earlier submitted that the bank had identified inaccuracies in data presented to the court that it needed to correct before it would be appropriate to file its defence.
Asked about the repeated internal warnings of the bank's inability to halt suspicious transactions highlighted in ASIC's statement of claim, an HSBC spokesperson replied, 'as the matter is before the court, we are unable to comment'.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Perth Now
an hour ago
- Perth Now
Qantas set for big fine after illegally sacking workers
Australia's largest airline is staring down the barrel of another nine-figure fine for illegally sacking more than 1800 workers during the COVID-19 pandemic. The Federal Court will hand down a hefty penalty to Qantas on Monday in what will be the latest court blow for the airline after a scandal-plagued recent tenure. Qantas outsourced its baggage handlers, cleaners and ground staff in 2020, in a move the court ruled was designed to curb union bargaining power in wage negotiations. It appealed the ruling to the High Court but the decision was not overturned, paving the way for Monday's penalty. The Transport Workers Union has sought the maximum penalty of $121 million, while Qantas has urged Justice Michael Lee to impose a "mid-range" penalty between $40 million and $80 million. Qantas will cop the fine on top of a $120 million compensation payment it has made to the ground staff for their economic loss, pain and suffering since their jobs were outsourced during the pandemic. It has argued the actions were a mistake, not a deliberate breach of the law. Qantas also sold tickets to cancelled flights for several years, triggering more legal turmoil and a $100 million fine after it was sued by the Australian Competition and Consumer Commission. The carrier, which was under the control of Alan Joyce at the time of the illegal sacking, lost billions of dollars during the pandemic, which decimated the aviation sector. But the former CEO did not address the scandal when he spoke at an aviation conference on Thursday, instead spruiking his ability to keep the airline afloat in unprecedented times. "But here's the real insight: resilience isn't a reaction … it's a decision made years in advance, often when it's uncomfortable, even unpopular," he said. "Qantas was the only major Australian airline not to go bankrupt during or after the pandemic … that wasn't luck. That was resilience."
Perth Now
an hour ago
- Perth Now
Growth can put spark into younger generations' future
Australia is failing its younger generations and the chair of the Productivity Commission believes a policymaker "growth mindset" can help. Danielle Wood says the generational bargain is in peril. "Young people today believe they won't live better lives than their parents did," the head of the nation's economic think tank will say at the National Press Club on Monday. "I'm worried too." Australians born in the 1990s were the first generation not to earn more than those in the decade before them. Now in their 30s, millennials are struggling to enter the property market "as policy choices have contributed to house prices growing much faster than incomes for the best part of three decades". This generation will also bear the brunt of climate change and the cost of decarbonisation, made worse by policymakers who have dodged the cheapest options, namely a national carbon price. Ms Wood, due to speak before the federal government's economic reform roundtable on Tuesday, says the challenges facing younger generations amount to productivity problems. About squeezing more from less, productivity allows wages to grow and helps "build things better and faster", such as homes and clean energy infrastructure. The commission has already spelled out a long list of recommendations to kickstart anaemic productivity growth in five separate reports released before the roundtable. Suggestions include reforming the corporate tax system and financial incentives for workplace training. Ms Wood will also call for an attitude shift at the highest levels of government policymaking and delivery. "This 'growth mindset' - an elevation of growth and the benefits it brings - has been missing from Australian policy for far too long," she said. She will point to the "growth of the regulatory burden" as symptomatic of a policy culture failing to prioritise growth. "Regulatory hairballs" are everywhere, she will argue, from 31-step approvals and licensing surveys for would-be Queensland cafe owners to "evermore stringent requirements for energy efficiency in the construction code". Australia's key economic stakeholders are set to gather in Canberra to propose solutions to the nation's ailing productivity as part of the government's hotly anticipated roundtable. Almost 30 groups representing farmers, pharmacies, universities and small, medium and large businesses have urged the government to reduce red tape and reform taxes without raising costs. "Australia is facing an uncertain future unless we fix the real challenges within our economy," Business Council of Australia chief executive Bran Black said. Environment groups have also urged the government to address concerns like nature law reforms. "Nature's economic role is too important to leave out of national reform conversations," Australian Land Conservation Alliance chief executive Jody Gunn said. "If we invest in the solutions it brings, we all win."
AU Financial Review
5 hours ago
- AU Financial Review
The week Chalmers can start to craft an economic legacy
The three-day Economic Reform Roundtable starting on Tuesday is Jim Chalmers' opportunity to make a fresh start on crafting an economic legacy to match the nation's great reforming treasurers. Before the 2022 election, Anthony Albanese promised Labor would seek to govern in the best reform traditions of the Hawke-Keating governments of the 1980s and 1990s. As treasurer, Paul Keating floated the Australian dollar, began winding down tariff protection, and reduced personal and company tax. As prime minister, he introduced the principle of enterprise bargaining into the industrial relations system.
