Scam victim sues HSBC for alleged negligence

A retiree has sued HSBC Bank Malaysia Berhad for alleged negligence, claiming it allegedly failed in its duty to advise him against proceeding with transactions that it purportedly could have deduced to be fraudulent.

In the suit filed by Messrs Raj, Ong, & Yudistra on June 23 at the High Court here, Lee Cheong Chee, 55, said he lost RM1.06 million and US$255,000 (RM1.09 million) in separate transactions due to being defrauded between late 2019 and September 2017.

He accused the bank of allegedly failing to perform its duty of care to him and allegedly breaching Bank Negara Malaysia’s (BNM) directives for local financial institutions to strengthen gatekeeping methods to prevent illegal financial schemes issued in May 2017.

“The bank in this claim is negligent because it failed to impose safeguards to detect the financial scam and prevent Lee from becoming a victim of financial scams,” Lee said in the lawsuit.

According to the lawsuit, Lee was tricked into investing in four separate entities — Bank de Binary, Stoxmarket, Speartrader, and HBC Broker — after being convinced through phone calls.

He then made 70 transactions to these four entities over 10 months, in deposits ranging from RM1,146 to RM68,965 and from US$30,000 to US$80,000 for those made in dollars.

All transactions were either made with Lee’s credit cards, or wired online through his debit account. Lee has repaid all the credit card usage in full.

Lee is claiming that the bank allegedly failed to inform him of possible fraud risks in his deposits, allegedly neglected to verify the repeated transactions with him, and allegedly failed to suspend any of the transactions pending such verifications.

He claimed it allegedly did not warn him that the pattern of transactions could allegedly indicate fraud.

Lee also asserted that the bank allegedly has an obligation to verify that the accounts used were registered to fully-licenced financial companies in good standing, and allegedly did not cross check the recipients against any advisory list maintained by BNM or the Securities Commission.

He argued that the registered addresses of the recipient accounts in Marshall Island and Georgia merited due diligence from HSBC.

Lee said HSBC allegedly failed to heed warnings from various financial regulators in foreign countries against dealing with scammers at the same time Lee was defrauded.

“Had the bank not been negligent, Lee would not have invested and made the payments to the scammers.

“As a result of the bank’s negligence, Lee lost a total of RM1,061,957.60 + US$255,000 to the scammers,” Lee’s statement of claim said.

Lee is seeking a full reimbursement from the bank for his lost funds, with additional pre- and post judgment interests of five per cent per annum from sums claimed, costs, and a declaration that the bank had indeed breached BNM directives.