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How To Recognise Financial Abuse and Get The Right Help

When people hear the term “domestic abuse,” they often think of physical abuse and domestic violence. While this is certainly one form of abuse that victims may experience, other forms such as emotional and mental abuse are just as prevalent. Another type of abuse that is beginning to be recognised in its own right is financial abuse. This is a way for the abusive partner to exert control over their victim. Financial abuse can be devastating with long lasting consequences for the victim.

What is Financial abuse?

Financial abuse, a type of economic abuse, has been infamously overlooked. Financial abuse occurs when one current or former partner within an abusive relationship controls the other’s financial affairs and makes all the financial decisions. Signs you may be experiencing financial abuse can encompass:

  • insisting the victim hands over their employment earnings
  • requesting the victim account for every penny spent
  • hiding or denying access to your own bank account or cards
  • denying access to money or refusing to allow the victim to work
  • forcing the victim to take out credit in their name (known as coerced debt).

The latter is known as coerced debt, and it’s something that many domestic abuse victims experience at some time.

The charity Surviving Economic Abuse estimates that 60% of domestic abuse victims have experienced coerced debt. It is estimated that coerced debt amounts to £23.5 million annually. Further details from the report can be viewed here.

In a 2015 study completed by Citizens Advice, it was reported that only 2 in 5 victims of coerced debt recognised it as an abusive situation. This number indicates how little awareness still exists around this topic. Unfortunately, coerced debt is becoming more common, with 75% of survey participants reporting that their abuser forced them to apply for credit.

What Is the Difference between Financial and Economic Abuse?

Financial abuse encompasses control of both incoming and outgoing money, while economic abuse wider refers to the abuser’s control over money and victim access to essential resources. Economic abuse broad falls into the following three categories:

Sabotage of Your Income and Restricting Access to Money

This can include actively preventing you from securing employment or attempting to restrict the number of hours you can work. It can also entail refusing to allow you to apply for applicable benefits or accessing your bank accounts. Abusers will often ensure your income is paid into an account you have no access to.

Restricted Usage of Money and Property

This can range from insisting all major property such as a house or vehicle are registered in the abusers name only down to micro-managing your access to cash. This can include providing you with an allowance or making you ask for money and will often involve the abuser keeping a track of every penny you spend.

Exploitation of Your Economic Situation

This can include stealing money that belongs to you or spending money held in a joint account that is meant to pay bills and other commitments. Abusers can often insist all debt is in your name such as loans and credit cards or could see abusers taking out financial agreements in your name without your knowledge or consent.

Why Is Financial Abuse So Serious?

Economic abuse can have a lasting, devastating effect. Many victims state that it makes it hard to leave the abuser and starts a cycle of dependence. When they finally muster up the courage to leave, some are left homeless and with no belongings other than what they’re wearing.

Many financial abuse victims don’t think there is a way out, and even if they manage to escape their abusive relationship, they have a hard time starting fresh. This is because their credit rating is poor and abusers control them by making them feel like they couldn’t survive without the abuser’s help.

Why Is It so Important to Address Financial Abuse?

If someone is manipulating money and other resources, it can have significant consequences that make it extremely difficult for the victim to leave the relationship or see any future outside of it.

That’s why we recommend financial institutions learn about and provide education about financial abuse and coercive control.

What Is Being Done to Tackle Financial Abuse?

The financial services industry is becoming more conscious of the existence of financial abuse and is taking more active steps to support victims. It has even been recognised as a form of domestic abuse in the Domestic Abuse Act 2021, which went into effect on 29 April 2021.

The Act refers to this form of financial abuse as “economic abuse” which is defined as any behaviour that has a substantial adverse effect on a person’s ability to earn, save or spend money, or obtain goods and services.

Women’s Aid is imploring the financial services industry to adopt a new voluntary code of practice that would assist victims and extend compassion.

The requirements include firms being more identifying and conscious of financial abuse:

  • to train in-house staff on how to deal with victims of abuse.
  • to offer victims the necessary help and advice, such as putting them in touch with the police.
  • to help victims regain control of their own personal finances by closing down a joint bank account or cancelling accounts with creditors.

Where Can I Get Help with Financial Abuse?

There are many great support networks out there to help if you believe you are a victim of financial abuse. You can seek free and confidential assistance from the helplines below.

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Customers can get free debt advice from the Money Advice Service – an organisation set up by the Government to offer free and impartial advice to those in debt. For more information from the Money Advice Service visit MAS is part of the Money & Pensions Service. We are not affiliated with MAS in any way.

Become Debt Free is a trading style of Re10 (Finance) Limited Registered Number 04651137.  Data Protection Act Registration Number – Z8613095

Become Debt Free specialise in providing and administering Individual Voluntary Arrangement (“IVA”) solutions to individuals based in England, Wales and Northern Ireland.  We do not administer Debt Management Plans, Debt Relief Orders, or any other debt solutions.  We only provide advice after completing or receiving an initial fact find where the individual(s) concerned meets the criteria for an IVA, therefore, all advice is given in reasonable contemplation of an insolvency appointment.

* To qualify for debt write off in an IVA with us, you must have a minimum of £7,000 of qualifying unsecured debt owed to two or more creditors.  The amount of debt write off is based on your own personal circumstances – typically this could be up to 85% of what you owe; and this has been achieved by over 10% of our customers who have successfully completed their IVA’s in the last 12 months.  The amount of debt write off differs for each customer and is dependent upon their individual financial circumstances and subject to the approval of their creditors.

Andrew Bowers is authorised in the UK to act as Insolvency Practitioner by the Insolvency Practitioners Association.


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