Financial Abuse; Definition and My Story as a Victim

Financial abuse is indeed another form of family abuse. So what does it look like, and what has been my experience as a victim of financial abuse? Read on..

Remember, if you are in an abusive situation, you can contact Lifeline on 13 11 14, you can visit 1800Respect, you can talk to your GP or you can contact Beyond Blue on 1300 22 4636.

Introduction

When we consider abuse within adult relationships, most people immediately think about a scenario involving a woman who is being physically or emotionally abused by their partner. In truth, there are a great many ways that a person can be abused within a relationship and often, toxic relationships involve several different kinds of abuse. One common, but less understood kind of abuse involves mistreatment in relation to financial matters and this is known as financial abuse. Read on to gain comprehensive understandings about financial abuse and to learn how to protect yourself from falling victim.

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Financial abuse can occur in many ways – but it is basically a lack of control over your own finances, such as being denied access to funds or bank cards

What is meant by financial abuse?

Financial abuse is just one form of domestic and family abuse. There are many ways that a person can financially abuse another, but it most often involves withholding money and taking complete control over all household expenditures and refusing to allow a person to be involved in making financial decisions. Financial abuse can happen to anyone and often goes alongside other kinds of abuse. In a family violence situation, financial abuse can be used to make a person feel further isolated and without access to any help or support.

Whilst financial abuse does occur within toxic and controlling relationships, it is also found in situations where one person needs to be dependent on another. Elderly people and those with health issues or depression are at risk of being financially abused if that trusted person takes advantage of the situation for their own benefit.

What are the signs of financial abuse?

As with other kinds of abuse, financial abuse is a repeated pattern of behaviour that has some very clear indicators. Often a person who is experiencing financial abuse might seem withdrawn or appear as if they don’t want to spend time with friends or family. In truth, this is likely just one of several ways that an abuser is seeking to maintain control over another person and the victim might not even realise that they are experiencing a toxic or unhealthy relationship.

The most obvious sign of financial abuse is not having access to money. A person might be given an ‘allowance’ or ‘budget’ that they must stick to or be required to account for every dollar that they spend. Financial abuse might begin with small expectations that become controlling over time and in a lot of cases the victim will either not be allowed to work or will not be able to access the money they earn from working.

Another sign of financial abuse is where one person creates debt in another person’s name or maxes out credit cards and then refuses to make payments on those cards. Unfortunately, most people who leave a financially abusive relationship will be left with a significant debt to pay off which is also why leaving a financially abusive relationship can be so difficult.

What are some forms of financial abuse?

There any many forms of financial abuse.  Often, the person will be in a very complex and toxic relationship that eats away at their self-confidence and self-esteem – making it hard for them to find the will or have the financial means to leave. Here are a few common forms of financial abuse:

–     A lacking in control over one’s own finances.

–     One person controlling all household expenditures.

–     Not being allowed access to bank accounts.

–     Not being allowed access to a debit or credit card.

–     Not being allowed to get a job or go to work.

–     Not being allowed to study.

Some financial abusers might also:

–     Force a family member to go guarantor on a loan.

–     Take out a loan in someone else’s name without their willing consent.

–     Force someone to work in a business without being paid.

–     Take money from a family member’s pension.

–     Sell the possessions of others without permission.

–     Misuse an Enduring Power of Attorney

–     Force a family member to change their will.

–     Refuse to pay child support.

–     Refuse to contribute to the household income.

You can test your knowledge and understandings about financial abuse by completing the quiz below: Quiz: Can you pick the signs of financial abuse? | Commonwealth Bank Australia: Next Chapter | The Guardian

What is financial abuse in marriage?

It is not uncommon for a married person to find that they are in fact a victim of financial abuse. In a toxic marriage, a person may try to take control over all assets and limit the other person’s access to resources which can result in isolation and ultimately prevent the spouse from leaving the marriage. Finding support to get out of a situation such as this might feel daunting but there are certainly agencies and resources out there to support individuals suffering from any kind of domestic or family violence. NAB bank provide useful information about your rights in terms of bank accounts, credit cards, shared debts, and so on. To learn more about how banks can support you when planning to leave a financially abusive relationship, check out this website: Financial abuse keeping banking safe – NAB.

Who is at risk of financial abuse?

Whilst anyone can potentially be at risk of financial abuse, there are a few situations where a person’s increased vulnerability means that they are at a higher risk of falling victim. Elderly people are significantly more likely to experience financial abuse as they get older – especially those with conditions such as dementia and Alzheimer’s disease. When finances must be trusted to someone else because that person is no longer able to manage them themselves, there is the possibility of that person betraying the trust and accessing the finances for their own personal gain.

Other categories of people are also at risk of financial abuse, particularly those who are suffering from poor health or clinical depression. When a person must rely heavily on another for care and support, there is always a risk of financial abuse occurring. People who live alone or who have been widowed are at a higher risk and this continues to increase with age. Those who have an intellectual disability may also be at risk of financial abuse if they are relying on someone else taking care of their finances or explaining things to them.

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Some people are at higher risk of financial abuse – such as the elderly, and those with intellectual disabilities

Of course, there are social risk factors that can increase the likelihood of falling victim to financial abuse as well. Many perpetrators of domestic and family violence create a situation where their spouse becomes highly dependent upon them and in the vast majority of situations, it is women who are more at risk than men.

The following website provides a range of information and resources that are useful for learning how to prevent and deal with financial abuse. Here, you will find out how to get free legal advice and an extensive list of organisations and services that can help and support a person who finds themselves in a financially abusive relationshipFinancial abuse – Moneysmart.gov.au.

Is it illegal to hide money from your spouse?

When relationships become serious, it is not uncommon for couples to merge their financial lives as they work towards shared goals and a shared future. In other circumstances, some couples prefer to keep their finances separate and this is perfectly acceptable – as long as both parties agree and are comfortable with this arrangement. The circumstance does change, however, when a person is intentionally hiding money from their partner as this is a deceptive behaviour which might be indicative of an unhealthy relationship.

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There is help and support out there for those experiencing financial abuse – the first step is identifying that what you are experiencing is in fact financial abuse

There are a range of reasons why a person might hide money from their spouse, but often it comes out of a lack of trust or fear. This does not bode well as a healthy relationship should mean transparency and honesty where both people can openly discuss issues and matters related to their finances and engage in shared decision making. Despite this, there are some circumstances where it might be a good idea to hide bank accounts or money from your partner if it means helping you get out of a toxic, abusive or manipulative relationship. If you are planning to escape an abusive relationship, here you will find detailed information to help you prepare and leave in a planned and safe way. How to Get Out of an Abusive Relationship – HelpGuide.org.

How do I protect myself financially from my spouse?

The best way that you can protect yourself from financial abuse is to ensure that you have good understandings of your personal financial situation. Whilst it is natural in some couples for one person to take on more responsibility in terms of paying bills and managing finances, it is important that both parties understand what money is coming in and going out. Taking a proactive approach to your personal financial management will help keep you protected, but here are a few other strategies to help you feel confident about your financial situation;

–     Always ensure that your bank and financial cards are protected by never handing out your PIN or password to anyone else.

–     Strongly consider whoever has third party authorisations over your accounts and ensure these are very trusted people.

–     Consider setting up direct debits and pre-authorised bill payments for your ongoing bills and expenses.

–     Make sure you keep track of your bank accounts and know what money is coming in and out.

–     Ensure you have good understandings of your investments and assets.

–     Never sign a contract or document without reading it carefully and never allow someone to pressure you to sign. Always seek legal or professional advice if you are unsure.

Having a good understanding of your personal financial situation and maintaining a level of control over your income and expenditure will certainly help you remain guarded and protected from potential financial abuse.

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The best way to prevent financial abuse from occurring is by having full awareness of your personal financial situation

How is financial abuse prevented?

One of the biggest challenges in relation to financial abuse is that it usually develops slowly and over time. New relationships are exciting and it takes time to really get to know a person. Whilst our natural instincts might be to trust and open our hearts, it is important to remain wary and guarded – especially as other toxic behaviours begin to emerge. Financial abusers are very good at what they do and this is why it is so important to know and understand the risk factors, especially for those individuals who are more susceptible – such as the elderly.

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The Australian Bankers’ Association (ABA) have developed a range of guidelines and fact sheets to help prevent the financial abuse of vulnerable people, including the elderly. According to them, financial abuse is notoriously under-reported and the ABA guidelines are there to help bank staff identify and respond to situations of financial abuse. You can phone the ABA telephone advice line on (08) 9221 7066 to seek free, confidential legal advice and you can find the ABA guidelines for preventing and responding to financial abuse here: Blank document (ausbanking.org.au).

My Story as a Victim of Financial Abuse

James

When I was 19 I got into my first real relationship and I couldn’t be happier! I met him at my workplace, a bakery where I had a part time job from high school, through to uni. James was a drug addict. When we began dating, I knew he dabbled in some drug taking, but I never believed it was an addiction, I simply thought it was recreational. The fact was, James had a serious problem and I didn’t realise the full extent of it until years later. James would smoke marijuana to be able to get to sleep at night, and use uppers such as speed, to wake up in the morning and start his bakery shifts at 3am, 6 days per week. I moved in with James when I was 21 and I was in a relationship with him for 6 years.

One night, James had a grand mal seizure in the middle of the night and I was in a panic, having never seen somebody have a seizure before, let alone assist them to prevent injury. I called an ambulance and he was rushed to hospital. Over the course of the next few months, James was having several seizures every week and many tests through the hospital, testing for epilepsy or other neurological conditions. All tests came back negative and it was deduced that these seizures were caused by excessive drug taking.

Regular seizures meant that James could no longer work, as he was not permitted to drive, or operate heavy machinery, such as those within the bakery. For 2 years, I supported myself and James financially. James was receiving assistance from Centrelink but he would spend this money on cigarettes, marijuana, alcohol and more drugs. James spiralled into depression and further drug taking, including ecstasy, copious amounts of pot and crystal meth (also known as ice). He was very mentally unwell and I loved him but felt trapped. I felt guilt at the thought of leaving someone who was so mentally unwell and thought it was my duty to stay with him and support him, in every way. So I paid ALL the bills (credit cards were maxed out), I worked full time, I worked overtime, I made calls to Centrelink, I organised his medical appointments and I did all the household chores and cooked dinner each night, after he had been taking more drugs and playing X-box all day.

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Why did I stay?

He told me he loved me. He said I was the only thing that was good in his life. He said he couldn’t live without me. He told me I was beautiful, I was supportive, I was amazing. When he was in a drug fuelled mess, it was the opposite. He was nasty, he was critical, he was mean. But I knew it was the drugs and the mental illness.

The turning point?

One day I went to work a 12 hour shift, I was sick but I went to work anyway so we could pay the bills. I came home exhausted and so sick, but starving. The house was a disgusting mess and I asked James why he couldn’t have at least had some dinner ready as I had worked 12 hours and he was home all day playing X-box. He yelled at me, got up and pushed me against a wall because I distracted him and made him ‘die’ when he was up to the ‘last level’ on his X-Box game, and I had the nerve to even ask him to cook a meal when he was “depressed and couldn’t bring himself to get out of bed, let alone do any cooking.”

I expressed my desire to leave the relationship as I finally started seeing the situation for what it really was. An abusive one. I told him I wanted out. He said to me he would kill himself if I left him. I believed him. I called suicide hotlines, asking for advice because I truly believed if I tried to leave, he would try to seriously harm himself. They told me it was emotional blackmail but I was still terrified that he would do something horrible.

James went to stay with his mum for a short time before getting admitted to a rehab and psychiatric facility with serious addiction and clinical depression. I finally left him. Properly. But I had serious credit card debt and James never paid me back any of the money he owed me. I vowed to never get myself in a situation such as that one ever again.

Definition of financial abuse that occurred here: refusing to contribute financially, spending the money we had on drugs instead of bills, taking advantage of my kindness and abusing me in multiple ways, including emotionally, verbally and financially.

Tom

I fell in love with Tom, Andy’s father when I was in my late twenties. We had a whirlwind romance and we moved in together after only 3 months of dating. Tom was charming, generous and a romantic. I thought this was ‘the one’. We never married but we were together for 8 years.

After 2 years, I fell pregnant with Andy. After a bit of a rocky period, having Andy actually brought us closer together.

Some red flags started to appear for me, in terms of our finances.

Tom’s family were all overseas, didn’t speak English, and apparently struggling financially. Tom felt it was his duty to support them financially and would transfer large amounts of money to them overseas. Well, that’s what he said he was doing. I started to become very suspicious, doubting his word as it appeared he wasn’t actually doing this at all, but rather spending money on other things.

At one point, Tom took out a personal loan without telling me, and bought a car, (we already had one each) telling me he bought it for a bargain of $3000, when in fact he had taken out a loan for $25,000 to pay for this thing. I only discovered this when our son Andy, a toddler at the time, had pulled the mail off the coffee table, and was ripping it open on the kitchen floor, while I was in the bathroom, and I came out to pick up the torn pieces. When I brought this up with Tom, I got verbally abused for ‘allowing’ our son to rip the mail open.

When Andy was 3 years old, Tom went overseas to see his family, telling me he would be gone for only a few weeks. He was gone for 5 months. He also needed a large chunk of our $30,000 savings (intended for buying a house) to help his family members who had health problems and expensive medical bills. So he took part of our savings, was gone for 5 months and in that time, took the rest of our savings. When he returned, we broke up.

Tom then returned overseas, and within a few weeks, was married to someone else. I was in shock. Tom then stayed overseas for another 7 months.

This was the hardest year of my life. I was raising Andy alone, with no family support and no money. I was working full time and paying rent and bills, having given Tom all of our savings, trusting that he really needed it. Tom didn’t pay me anything at all during that year, and I struggled like I never have before. When I got sick, and Andy was sick as well, I had no help. I had to keep pushing, care for him, keep working, and do it all alone.

When Tom finally returned after that one year, he reimbursed me (in installments) for the half of the savings he believed was his portion. He didn’t pay me any child support or give me any money to contribute to all the bills I had to pay alone, for that entire year.

Definition of financial abuse that occurred here: not paying child support, hiding money from me, spending our combined money without telling me, lying to me about what he was spending our money on.

What Changed?

I knew something had to change. I refused to be a broke single mum forever and I wanted to strive for financial comfort and to eventually buy my own home. I knew I was a long way off but I also knew I had to start somewhere. You can read my ‘Single Mums Money Journey’ HERE, as well as my ‘TEN ways to thrive, not just survive as a single mum’ HERE. I started by saving $10, then $20, then more and more, finding ways to be frugal and ways to save money, while still being the best mum I could be. I sold A LOT of household items. You can read my article on How I made Thousands, selling my clutter’ HERE.

Summary

There is help and support out there for those experiencing financial abuse – the first step is identifying that what you are experiencing is in fact financial abuse.

Financial abuse is about more than just money, it is about disrespecting the rights of individuals and taking advantage of people in positions of vulnerability. Knowing what to look for will make sure you are ready to act on breaches of trust and to have the confidence to ensure that you are treated respectfully and not taken advantage of.

Financial abuse is just one form of abuse and White ribbon have made it their mission to prevent women from becoming victims of abuse and violence across Australia. Here they provide a range of strategies for protecting oneself against a potential abuser. Prevention strategies – White Ribbon AustraliaKnowledge is certainly power. Understanding the risks will help keep you safe from falling victim to a financial abuser.

Remember, if you are in an abusive situation, you can contact Lifeline on 13 11 14, you can visit 1800Respect, you can talk to your GP or you can contact Beyond Blue on 1300 22 4636.

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