Financial abuse is a prevalent form of domestic violence where one person uses money to control and dominate another. By manipulating financial resources, abusers restrict, isolate, and exert power over their victim’s economic options.
Contrary to popular belief, financial abuse isn’t confined to romantic relationships like husband and wife or partners. It can also occur in other dynamics, such as parent-child or caregiver-patient relationships.
In this article, we’ll explore common types of financial abuse, how to recognise it, and steps to take if you’ve been a victim.
Signs of Financial Abuse in Romantic Relationships
Most couples experience disagreements about money at some point. Differing views on finances are one thing, and can often be resolved through open and honest communication. However, when one partner controls the finances and uses that power to trap or dominate the other, it could be a sign of financial abuse.
Financial abuse can start subtly and escalate over time. Additionally, it can be difficult for outsiders to recognise a financially abusive relationship. There is no typical victim of financial exploitation. Financial abuse can affect anyone regardless of gender, race, income, education or employment status.
This type of abuse goes far beyond simple financial denial. Here are some warning indicators of financial abuse to look out for in your own relationships and those of your loved ones:
1. Refusing To Provide Money, Financial Information, or Necessities to a Partner
Hiding money
Providing a fixed allowance
Demanding receipts for purchases
Denying essential items like clothing, food, or medication
Excluding the partner from important financial discussions
Preventing access to joint finances and household financial decisions
Blocking access to ATM or credit cards
2. Making It Difficult for a Partner To Be Financially Independent
Preventing them from working or attending school
Demanding they quit their job
Causing frequent absences or lateness from work
Requiring them to work for little or no pay in the abuser’s business or insisting on a lower-paying career
Intimidating them at work to hinder job performance
Claiming their personal benefits
3. Forcing a Partner To Perform Specific Financial Actions
Compelling them to file false tax returns or other financial documents
Pressuring or coercing them to take out loans
Making them sign documents related to stocks, bonds, or other assets
Coercing them into signing a power of attorney so the abuser can sign documents without their permission
Other Forms of Financial Abuse
Financial abuse also occurs outside of romantic relationships. Two of the most common types are financial abuse of older adults by their adult children, relatives, or caregivers, and financial abuse of children by their parents.
Financial Abuse of Minors
It’s normal for parents to have control over their minor children’s financial and personal information. However, it becomes financial abuse when parents exploit their children and misuse this information.
This often happens when parents face financial hardship. They resort to desperate measures by using their children’s identities.
For instance, parents might open a credit card in their child’s name with no intention of paying it off, ruining their child’s credit. Or, they could take out a loan in the child’s name and default on the payments.
Sometimes, parents will sign up for cell phone or cable services in their child’s name but never pay the bill. Children are particularly vulnerable to financial abuse, similar to elderly individuals who may be unable to advocate for themselves.
Any instances of financial abuse involving minors should be reported to a trusted family member or, if necessary, a lawyer who can advise on how to handle the situation.
Elder Financial Abuse
Elder financial abuse is a widespread problem that can take many forms. Perpetrators can include attorneys, home care aides, acquaintances, neighbours, and family members.
These individuals exploit their position of trust or power to gain financial advantage from the elderly person in their care. Often, they misuse the senior’s power of attorney to make detrimental financial decisions.
Financial abuse can take many forms, including misusing credit cards, ATM cards, or checks; stealing cash, assets, or other belongings; or taking out loans without intending to repay them.
If you suspect financial abuse of an elderly person, contact a family law attorney to understand the steps you can take to protect them.
What are the Consequences of Financial Abuse
Financial abuse has far-reaching consequences for victims, extending long beyond the abusive relationship. Not only does it cause immediate financial hardship, but it’s often the first sign of a pattern of domestic violence.
Beyond the immediate financial difficulties, financial abuse has long-term implications.
Financial Repercussions
Victims of financial abuse often face long-term financial consequences. Due to limited access to financial accounts in their own name, they frequently have poor credit scores or no credit history at all.
Abusers often severely damage their victims’ credit by accumulating debt in their name and failing to make payments. Furthermore, victims of financial abuse may find it difficult to secure employment due to limited work experience. This can significantly hinder their ability to earn a living long after the abusive relationship has ended.
Legal Ramifications
Financial abuse often has legal consequences, such as fines for filing false tax returns and penalties for falsifying loan documents. Victims often find themselves responsible for debts incurred in their name without their consent.
How to Seek Help for Financial Abuse
No matter how overwhelming things seem, you don’t have to stay in a financially abusive relationship. The first step is acknowledging the problem and deciding you want to leave. From there, you can start breaking free from a financial abuser by following these steps:
1. Gather Your Financial Information
Collect as much financial information as possible. This includes copies of joint accounts, bank statements, credit card statements, and tax returns.
You can obtain a copy of your credit report from one of the three main credit bureaus. It’s also helpful to have copies of your birth certificate, social security number, medical records, and any other relevant paperwork.
Keep these important documents secure. If you’re unsure, give copies to a trusted person who doesn’t live with your abuser.
2. Start Educating Yourself About Money Matters
You may have limited financial knowledge after being denied access to your daily accounts and household financial decisions. Begin by understanding the basics, such as how your credit score impacts your financial situation.
3. Begin Setting Aside Personal Funds
Saving your own money is a crucial step towards leaving an abusive relationship and, if necessary, preparing for a divorce, even though it might seem challenging.
Saving when you have little can be difficult, but it’s possible. Consider unconventional ways to save. Hide tips from your job or ask a friend for small amounts of cash. Try to apply for a credit card in your own name to establish a credit line for emergencies.
4. Seek Support
Most importantly, don’t hesitate to ask for help. Build a support network around you, including a therapist, counsellor, or domestic abuse advocate. Confide in trusted family and friends about your situation. The National Coalition Against Domestic Violence also offers resources for financial abuse victims.
If you need financial assistance, contact a free credit counselling agency. These organisations can help you create a debt repayment plan and provide free financial education.
Last but not least, your safety is paramount. Before leaving an abusive situation, consider taking legal steps to protect yourself if you feel threatened. Consult with a lawyer or legal aid organisation to understand your options.
You may be able to obtain a restraining order or protection order to prevent your abuser from contacting, threatening, or harassing you.
Financial abuse is something you can overcome.
While it can take many different forms, financial abuse is always about one person controlling another. It’s important to understand that if you’re experiencing financial abuse, there is hope.
By educating yourself and seeking support from others, you can escape an unhealthy situation and rebuild your financial life.
