What Is Financial Abuse? Recognizing Signs And Moving On
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According to the National Network to End Domestic Violence (NNEDV), financial abuse occurs in 99% of all domestic abuse cases. Financial abuse can be perpetrated by friends, family members, and partners and can be a serious and dangerous pattern of behavior. Knowing the signs of financial abuse may help you or someone you love move forward and find support. If you're experiencing a crisis, call the above hotline.
What is financial abuse?
Financial abuse is a form of abuse through which one individual seeks control over another individual's financial resources or otherwise interferes with finances in a way that causes harm. In an interpersonal relationship where financial abuse occurs, the perpetrator may control access to the household finances, take advantage of, or steal from the other person's income, forbid the other to work and make their own money, or make financial decisions in the other person's name without their consent.
What is financial abuse? Defining an abusive relationship
At times, financial abuse is called economic abuse. Financial abuse is a form of intimate partner violence, and it's often used to keep someone stuck in a relationship or control the other person. However, romantic or intimate partners aren't always the culprits of a financially abusive relationship. Family and caregivers can also engage in financial abuse by withholding access to money or taking advantage of a family member’s income or credit cards. This can be a challenge for older individuals who are cared for by family and might be unable to set boundaries for themselves.
Like many forms of abuse, financial abuse in relationships often begins slowly and covertly. It may sometimes involve feigned care for the person on the receiving end. The perpetrator could claim they're helping the person or taking care of the finances because the other individual is too busy or overwhelmed. Even if you suspect you're being controlled, the individual might convince you they're acting healthily. Financial abuse could occur independently, but it can also be paired with other forms of domestic violence and abuse, including verbal and emotional abuse, physical abuse, stalking, and sexual abuse.
Signs of financial abuse in relationships: Bank accounts, credit cards, and money
Below are several potential signs and manifestations of financial abuse to look out for in any type of relationship:
- Controlling household finances
- Keeping secrets about household finances or assets that affect the other adult in the relationship
- Forbidding someone from working, actively trying to sabotage employment opportunities, or interfering with long-term employment
- Withholding finances or determining and providing an "allowance" to the other adult in the relationship
- Taking money from the paychecks of the other adult in the relationship
- Accruing debt on joint financial accounts
- Taking money from and not contributing to joint financial accounts
- Stealing someone's identity, inheritance, or property
- Withholding basic needs or the funds someone requires to obtain basic needs, such as food and childcare products
- Forcing someone to write bad checks or submit fraudulent tax returns
- Forcing the other adult to give them money from public benefits or threatening to turn the other adult in for misuse of benefits
- Refusing to pay child support, evading child support, or drawing out a divorce process by hiding information about assets
- Submitting false insurance claims
- Refusing to pay bills
- Causing a drop in someone else's credit score
- Forcing someone to work unpaid or for less than minimum wage
- Guilting someone for gifts or payments made to them
Since financial abuse might not be in the mainstream eye, not everyone identifies this form of abuse when they go through it. For this reason, awareness of abuse tactics can be beneficial.
Seeking support
The National Domestic Violence Hotline has a page that can help you create a safety plan if you are currently facing abuse and a page that can help you learn about internet safety.
An abusive relationship: Impacts of financial abuse
Financial abuse can have long-term effects. These effects may vary based on the specific details of the perpetrator's actions, and they can last after a relationship has ended. Impacts might include debt or limits to one's ability to achieve housing.
However, survivors may be able to rebuild their financial health. One positive first step may be exiting the crisis by contacting friends, family, or a shelter. A short-term plan can help someone get back on their feet and achieve or work toward financial stability. After that, a long-term plan may be beneficial.
Those who work with individuals who have survived or are exiting abusive situations are often aware of how a perpetrator may seek to gain control over the survivor. In addition to helping individuals exit these situations, these resources may be able to offer guidance on ways to pursue financial healing.
How to move forward as a survivor of financial abuse
If you are a survivor of financial abuse, it is possible to move forward and heal. Whether the abuse was recent or in the past, you might implement several actionable strategies for healing, including the following.
Pursue financial healing
It can take time to heal from financial abuse emotionally. Try to be kind and compassionate toward yourself as you rebuild, and don't hesitate to seek help. You may not be able to undo every impact. For example, you might not get back the money your former partner, family, or caretaker spent. However, taking independent control of your accounts and assets might offer you confidence and self-compassion after experiencing financial abuse.
Establish peer and social support
Strong, healthy interpersonal connections are often advantageous for those who have overcome abuse and are associated with better physical health. Consider turning to the positive people in your life who help you feel optimistic about who you are.
Try a support group
Support groups may be valuable for those who have experienced financial abuse, especially if you feel alone in what you're going through or don't currently have people to turn to. Support groups are often free of cost and can be found online or in face-to-face settings.
Work with a therapist
A trauma-informed therapist may help you work through the complexities of abuse. Intimate partner violence can affect people in many ways, potentially impacting self-esteem and interfering with friendships, future partnerships, or familial relationships. It can also contribute to developing conditions like post-traumatic stress disorder (PTSD).
Online therapy
If you're living in a shelter, looking for discreet care, or currently in an unhealthy relationship, you might also benefit from online therapy through a platform like BetterHelp. Online therapy has been proven effective for several mental health concerns, including depression, anxiety, and PTSD.
There are various ways to find a therapist who offers virtual sessions, including signing up for a platform. Online therapists practice a range of specialties, and some offer matching systems so you can find a therapist unique to your needs. If you don't like the first therapist you work with, you may also have the chance to change your therapist within a few minutes. Being a survivor of abuse can be challenging, and having control over the type of support you receive may help you feel more independent. In addition, online therapy is often more cost-effective than in-person options for those without insurance. You may also be able to sign up for a financial aid option.
Takeaway
What is financial abuse?
Financial abuse can occur in many ways. Someone may open or use existing accounts to spend money in an individual's name or using a joint account, rack up debt without the person's knowledge, refuse to pay bills, control household finances, or keep secrets about finances that impact another person's financial standing.
Financial abuse is one type of controlling behaviour, and domestic violence cases are another type of controlling behavior involving physically hurting and/or emotionally abusing the victim. The two types of abuse often go hand in hand.
Who is at risk of financial abuse?
Financial abuse can affect anyone. However, individuals who are over 50 can be more vulnerable to financial abuse and may face a heightened risk. The pandemic has also impacted financial abuse and its prevalence, and pregnant individuals may face greater vulnerability to financial abuse.
What are two examples of financial abuse that involve bank accounts, credit cards, and money?
Below are two examples of financial abuse that might occur:
John asks his partner Mariana to stay home as a housewife, even though she wants a career. He takes joint control of her bank account and takes her debit card through coercion. When Mariana wants to purchase an item, she is forced to ask John. John is emotionally abusive at home, and Maria feels she can't leave because she can't access her documents and bank account. John has locked all of her documents in a safe, which Mariana cannot access.
Lydia and her wife Janice disagree on all financial matters. However, Lydia has a poor credit score, and Janice's score is high. To receive more loans, Lydia uses Janice's credit cards and takes out a loan in her name from a bank. Lydia doesn't repay these credit loans, and Janice's credit score drops. She doesn't notice until a few months later, and Lydia denies all occurrences, stating Janice must be "imagining scenarios" or that a "scammer" stole her identity.
These examples show two different forms of financial abuse. One form involves a partner taking control of one individual's financial documents, bank accounts, and identity documents so they struggle to leave the relationship. In Lydia's case, the financial abuse was based on stealing her partner's identity and using her credit without permission.
What are the characteristics of financial abuse?
Financial abuse can involve the following dynamics: refusal to allow a spouse or other person close to you to work to make them financially dependent, withholding money from the other person by being the sole owner of a bank account, controlling financial assets such as being the only name on a title to a house or car, or using a family member's money or selling a family member's possessions without permission or in a way not agreed upon.
How to know if someone is being financially abused?
Financially abusive behaviours come in many forms. Some questions to ask to identify financial abuse, according to Legal Aid DC are:
- Is someone interfering with your ability to work such as stopping you from attending job training, making someone call in sick on the days of important meetings, or saying bad things about a family member to the family member's colleagues?
- Is someone forcing you into debt by spending excessively on joint credit cards?
- Is someone creating conditions for making someone financially dependent by exercising complete financial control over shared money and deciding how family income is spent, like limiting access to bank accounts or restricting access to household income?
- Is someone manipulating you with money to gain power?
- Is someone messing with benefits and making legal threats, like falsely threatening to report you for making fraudulent insurance claims, misusing benefits or public assistance, threatening to withhold child support payments, trying to control someone else's finances, or trying to claim a family member's pension or claim social security benefits that don’t belong to them?
What are the terms of financial abuse?
Some basic terms involved in financial abuse are "withholding money,” “restricting access,” “controlling spending,” “preventing work,” “stealing,” “hiding assets,” “taking control of assets,” “building debt,” and “financial manipulation.”
What to do if someone is experiencing financial abuse?
If you learn that someone is experiencing financial abuse, find a place to talk away from the abusive partner or person so that you can assess the situation and offer assistance. Depending on the victim’s ability, share resources or offer to find legal assistance or call the National Domestic Violence Hotline together to learn about steps to take to stop the abuse. Financial abuse is extremely difficult to get out of, and if the person doesn’t get help, the effects of financial abuse, and possibly accompanying domestic abuse, can have long-term deleterious consequences, such as not being able to afford basic expenses or find safe and affordable housing.
How can you protect yourself from financial abuse?
The most important thing you can do to protect yourself from financial abuse is to not relinquish control over all the household income to a spouse or another family member. Make sure that your partner's finances are not kept secret from you. Keep your name on titles and bank accounts. However, keep your credit card separate by not cosigning so that you don’t end up carrying a family member’s debt, and don't allow any family member access to your account details. Retain transparency in household spending so that your partner or family member isn’t able to hide assets or spend money secretly. If you own a family business, make sure that you have access to records of business income and expenses.
And if there is any coercion or family violence involved, find a way for you and other other family members who are vulnerable, such as children or the elderly, to safely leave the situation, and seek support from the National Domestic Violence Hotline or another agency.
What are the factors that contribute to financial abuse?
Abusive relationships that include financial abuse disproportionately affect those who rely on financial support, or other types of support from others. This can include the elderly or those who are cognitively impaired, are under- or unemployed, lack educational diplomas or degrees, or have little social or family support. Domestic violence victims of physical or emotional abuse are particularly vulnerable to financial abuse.
How can I protect my personal finances?
Protecting your personal finances is important for your long term security. A few easy steps to take are keeping good financial records, learning how to identify fraud and phishing scams, protecting your identity, being sure not to provide financially sensitive information via online sources or over the phone, and reporting any instances of fraud immediately. You should also keep your financial information and account information, including account numbers or access codes, secure. Also, don’t include any family member's signature on bank accounts or other financial assets, unless you have legal protections in place, such as an enduring power of attorney.
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