9 ways to spot financial abuse
9 ways to spot financial abuse – and what your customer-owned bank can do about it
Financial abuse is a form of domestic violence where money is used to control, track or trap someone, and it occurs in nearly all cases of domestic violence.
Financial abuse may see victim/survivors lose access to their money, be manipulated into making financial decisions, or even be pressured to sign over documents or take on debt.
Customer-owned banks are dedicated to disrupting financial abuse, and have joined forces with financial safety expert Catherine Fitzpatrick, Founder of Flequity Ventures, and other banks and finance firms to launch the Financial Safety Alliance.
“Everyone, including businesses and banks, has a role to play if we are going to meet the ambition of ending gendered violence in a generation,” Ms. Fitzpatrick said.
“Research shows that women are more likely to talk to their bank about economic abuse than to a specialist family violence service provider. This is because money gives you choices – to leave, to disentangle and to start again.”
Because financial abuse relies on control and secrecy, it is often hidden, leaving victims/survivors unaware they are being targeted.
Here are some of the warning signs of economic and financial abuse.
1. Total control of household income
One of the most common signs of financial abuse is when one person assumes complete control over all household earnings, regardless of who earned them. They might decide how every cent is spent and force the other person to ask for an "allowance." This often involves withholding funds for basic necessities like food, medicine, or clothing, creating a state of total dependency.
2. Unauthorised accumulation of debt
This occurs when an abuser opens credit cards or takes out loans in a partner's name without their knowledge or consent. They may also pressure someone to increase credit limits or force them to act as a guarantor for loans they cannot afford. This tactic leaves the victim legally responsible for debt they did not create, damaging their credit score and future financial freedom.
3. Misuse of joint accounts and assets
Joint accounts are frequently exploited, especially during times of relationship strain or separation. A perpetrator might drain a mutual mortgage offset account or withdraw large sums of money without agreement. In other cases, they may refuse to contribute to mortgage payments or sell shared property without permission, effectively sabotaging the other person's housing security.
4. Digital surveillance and financial stalking
Modern banking tools are sometimes weaponised to track a victim's movements and behaviours. An abuser might monitor purchase descriptions to figure out where a partner has been or what they are buying. They may also use the description fields in digital bank transfers to send abusive or harassing messages, turning a standard financial transaction into a tool for emotional harm. This was a tactic used by the first perpetrator to be jailed under NSW coercive control laws.
5. Exploitation and theft of personal funds
This involves the direct taking of money that belongs solely to the victim. Examples include taking money from a partner's pension or superannuation without permission, selling their personal belongings without consent, or even failing to pay them for work performed in a family business. It is a direct violation of personal property rights designed to keep the victim broke.
6. Deliberate sabotage of employment and education
To ensure a victim cannot become self-sufficient, an abuser may prevent them from attending work or getting a job. This can involve sabotaging their ability to attend important meetings, blocking access to education or training, or even harassing the person’s colleagues at their workplace. By destroying a person's career prospects, the abuser ensures they remain trapped financially.
7. Intentional financial neglect
In this scenario, an abuser withholds financial support despite having the means to provide it. This includes neglecting to pay child support or refusing to contribute to household expenses. Often, they will force utility bills like electricity and gas into the victim's name only, ensuring that if the bills aren't paid, the victim’s credit is the only one destroyed.
8. Destruction of property and gambling
Financial stability is also threatened through the physical destruction of property or the reckless use of shared funds. An abuser might damage or steal property to cause financial distress or gamble with money meant for rent and bills. These actions create a constant state of financial crisis that makes it difficult for a victim to plan for the future or escape.
9. Information withholding and account blocking
A key element of control is the denial of information. An abuser may hide details about their own income or the total household wealth while simultaneously blocking the victim’s access to bank accounts. By keeping the victim in the dark about their financial reality, the abuser maintains a power imbalance that makes independent decision-making impossible.
Identified signs of financial abuse? Here’s how your customer-owned bank can help
If you believe you are experiencing financial abuse, your customer-owned bank can provide various forms of assistance to help secure your finances.
For example, they can look into suspicious activity by investigating any transactions that you did not personally authorise.
They can also assist in updating your online banking credentials, contact information, and account PINs, to further protect your privacy and access.
Additionally, your bank can help you set up entirely new accounts or facilitate other banking services to ensure you have a safe and independent way to manage your money.
Financial abuse can happen to anyone, and the abuser could be a partner, a family member, carer or friend. Remember, financial abuse is never your fault.
The Financial Safety Alliance, founded by social enterprise Flequity Ventures, brings together the Customer Owned Banking Association, the Australian Banking Association, the Australian Finance Industry Association and Arca. This alliance will help more than 200 banks and lenders to disrupt financial abuse through safer product and service design. Through this coordinated action, Australia is setting a new benchmark for how financial institutions can work together to prevent abuse and safeguard customers. More information here.
