Financial abuse in Australia
Financial abuse takes many forms but is ultimately all about power and control. From accessing your money without your knowledge – or under duress, to someone preventing you from earning an income or spending your money the way you want to, it’s one of the most powerful tactics abusers use to keep people trapped in relationships.
Recovering from financial abuse is about more than money – it’s about the ability to handle your own situation, in your own way, and to have your freedom and independence respected and reinforced. For Way Forward, that means providing support without judgment or expectation.
What is financial abuse?
While financial abuse can be experienced along with other forms of abuse, like emotional or physical abuse, they don’t necessarily go hand-in-hand – abuse is abuse, whatever shape it takes.
Whether you’ve had money stolen or withheld, been coerced into obtaining loans, defrauded or had your financial affairs controlled by a partner, family member, carer – or anybody else for that matter – you may be experiencing financial abuse. And it’s not ok.
Financial abuse (also known as economic abuse) can happen to anyone, regardless of age, gender, religion, sexuality, ability, education or socioeconomic background, however certain circumstances can increase our exposure to risk. Financial abuse is most prevalent where there is an imbalance of power, for example among people who:
- Are experiencing language barriers, or have difficulty reading, or directly accessing services
- May be socially isolated or dependent on others for their basic needs
- May have difficulty understanding complex concepts or making decisions
- Are reliant on others for help with the management of their financial affairs
- Are already being subjected to other forms of abuse, such as domestic and family violence
- Or whose family background or beliefs might cause them to be excluded from financial decision-making.
Indicators of financial abuse
While financial abuse can be hard to detect, there are a few key indicators to look out for:
Is someone telling you how to spend your money, or stopping you from spending it how you want to?
That might mean discouraging you from spending money on basic needs, including things like home maintenance, to protect assets for inheritance. Or perhaps limiting access to finances, refusing to contribute to the household budget and requiring you to account for your own spending.
Is someone preventing you from earning your own money?
If someone is preventing you from leaving the house, making demands of you during working hours, nor denying access to transport and so on, they may be making it impossible for you to hold down a job and maintain an independent income. In doing so, they may make you completely reliant on them or, perhaps, leave you without access to funds at all.
Has someone taken your money or assets for ‘safekeeping’?
Controlling or coercive behaviour might include taking your wages, social security payments or other allowances, or requiring you to move your assets into someone else’s name. Doing so can leave you extremely vulnerable.
Has someone accrued debt in your name?
This could mean spending freely on shared accounts or joint credit cards, leaving you financially exposed, or even fraudulently using your identity documents to access credit.
Are any of your possessions missing, or are there unexplained withdrawals from your account(s)?
Whether someone has physically removed items from your home or transferred/withdrawn money from your account without your permission, theft is theft.
Are the sums just not adding up? Unexplained shortfalls or payments unexpectedly in arrears?
If the people you’re relying on to help aren’t providing receipts for shopping or other financial transactions, it pays to be vigilant. If you’re suddenly, and unexpectedly, finding yourself short of money, it might be a good idea to take a closer look.
Have you been pushed to give away assets or gifts?
That might mean being pressured to change your will, persuaded to make unusual monetary gifts or coerced into signing over your home to a relative.
Types of financial abuse
Financial abuse can take many forms, from over-charging vulnerable people for goods and services to romantically targeting someone for financial gain, but it’s most commonly identified as an issue for older people and within domestic relationships.
Elder financial abuse
The difficult combination of low levels of financial and/or technological capability, hand-in-hand with declining cognitive capacity, can make it increasingly difficult for older people to navigate the complexities of their finances. While relying on friends, family members or carers may feel like a necessity, that trust can be all too easy to abuse.
From misuse of debit or credit cards, cashing cheques or accessing social security benefits without permission, to abusing authority as a joint signatory, the impact can be financially devastating.
For others, coercion and control are the defining features of their experience. Some have their access to money restricted, or are deceived, persuaded or forced into giving away Power of Attorney over their financial affairs, amending their will or altering their insurance policies.
Whether it’s the outworking of ‘inheritance impatience’ or outright theft, whatever form abuse comes in, it can be devastating.
Financial abuse in relationships
A 2016 survey by the Australian Bureau of Statistics (ABS) found that almost one in four women (23% or 2.2 million) experienced emotional abuse by a current and/or previous partner since the age of 15, compared to just over one in six men (16% or 1.4 million). This includes:
Someone controlling their ability to know about, have access to or make decisions about household money (38% of women report being affected (635,000) compared to 22% of men (233,600).
Someone controlling or trying to control their ability to work or earn money (22% of women report being affected (372,700) compared to 11% of men (116,200)).
Most recently, the Covid-19 lockdowns created a hothouse environment for abuse to progress unchecked. For those isolated with a violent partner, the pandemic blocked access to support networks and community contact. Indeed, with the need to shop more online during that period, and the move by many businesses to encourage payment by card, even more opportunities were created for perpetrators to exert control over finances.
But economic abuse doesn’t always stop with day-to-day spending. It can mean accessing loans or drawing down on a mortgage without the other partner’s say-so, even forcing someone to access superannuation early (for example, through the COVID-19 early release of super program). Coerced or not, if your name is on a loan contract, then you may be held responsible – even if it’s a debt that you know nothing about.
Is financial abuse a crime in Australia?
The Centre for Women’s Economic Safety says that economic abuse is defined in domestic and family violence legislation in every Australian state and territory, except New South Wales. However, it’s not a stand-alone criminal offence, nor is it necessarily ‘well recognised by police, lawyers, courts or society in general’.
What that means is, withholding money, financial coercion or controlling household spending can be defined and dealt with as family violence. However, instances of theft, fraud and slavery are also offences in their own right – regardless of context.
What to do if you are a victim of financial abuse?
If you, or someone you know, is experiencing financial abuse, it’s important to get help as quickly as possible.
1800RESPECT (1800 737 732) is the national domestic and family violence counselling, information and support service.
1800 ELDERHelp (1800 353 374) is a free phone line triaging calls from across Australia, and directing them to their relevant state and territory service.
These organisations will help you identify the right services or support for your individual situation, and what actions you can safely take. From there, you can start to unpick the ongoing financial consequences of your experiences.
How Way Forward can help with your financial situation
It’s important to stress that we do not provide direct counselling support in relation to financial abuse. However, we can support people with negotiating a payment arrangement, regardless of what is happening at home. Our team of hardship advocates are here to provide non-judgement support, whether you choose to disclose your personal situation or not.
We recognise that not all situations are acrimonious, and particularly in instances of family and domestic violence there may be a desire to not “rock the boat”. For situations where loans or credit cards have been taken out in a victim’s name but not used to support or benefit them, there may be avenues for Way Forward to assist people to regain control of their finances and rebuild their confidence to move forward.
Debt can be hugely stressful and distressing, particularly if it’s been caused by someone else but left for you to deal with. The sooner you reach out, the sooner we can assist you.
As a small not for-profit-organisation, we have a dedicated team of hardship advocates, who have typically worked for financial institutions or as financial counsellors – they’ve dealt extensively with creditors and are here to negotiate better outcomes for our clients.
When you call us, we’ll go through a short list of simple questions – these will allow us to understand your personal circumstances and challenges, debts and repayments, as well as your income and expenses. Armed with all this information, we can work through your options to get out of debt, including potentially contacting creditors and negotiating changes to your repayment amount.
Above all, at Way Forward we respect your right to choose how you navigate your own situation – we’ll work with you compassionately and respectfully to design your own way forward.
Start your journey to financial freedom today.