Trigger warning: This article may contain words that may trigger the readers and survivors of this trauma. Reader discretion is advised.
Financial abuse is the misuse, mismanagement, or exploitation of a person's financial resources by a person they are in connection with, such as a partner, family member, caregiver, or friend, whether it is done intentionally or unintentionally.
Abusers frequently use financial abuse to establish power and authority in a relationship. Along with emotional, physical, and sexual abuse, financial abuse involves actions that intentionally threaten, manipulate, and control the victim to keep them in the relationship. In some circumstances, financial abuse persists; in others, it only becomes apparent after the victim is trying to leave or has already left the relationship. Although less well-known, financial abuse is one of the most effective ways to imprison a victim in an abusive relationship and severely impairs the victim's capacity to remain safe after leaving an abusive partner.
Examples:
Forbidding the victim to work.
Controlling how all of the money is spent.
Withholding money or giving "an allowance."
Refusing to work or contribute to the family income.
Forcing the victim to work in a family business without pay.
Filing false insurance claims.
Forms:
- Controlling financial access: The abuser may restrict the victim's usage of cash, credit cards, or bank accounts, leaving them unable to provide for their families.
- Forcing financial dependence: The abuser may prevent the victim from working or force them to quit their job to make them financially dependent on the abuser.
- Taking the victim's money or valuables: The abuser may take the victim's cash, jewelry, or other valuables.
- Financial coercion: The abuser may pressure the victim to sign documents transferring assets, take out loans, or make other financial decisions in their best interest.
- Credit sabotage: By opening accounts in the victim's name without their knowledge or by accruing debt on already-existing accounts, the abuser may damage the victim's credit.
Effects:
In the short term, the victim can experience stress related to trying to pay bills but not having enough money to do so, collecting interest and fees from charges, and entering a debt cycle. Due to their excessive workload, individuals might need to be made aware of their debts due to a lack of access to account information, the inability to save money for their family's needs, or to be able to flee. This will affect their credit rating and savings over the long run, affecting their capacity to find alternative safe housing (like private rental housing). The impact on their financial situation could last for many years.
Victims:
According to desk research of published literature conducted by the FCA, victims are likelier to be single parents, people with impairments, and low-income individuals. It is important to note that because Universal Credit is paid on a household basis, the criminal may find it simpler to maintain control.
Finally, it should be noted that financial abuse is a severe type of domestic violence that can have a lasting impact on its victims. It entails manipulating or abusing a victim's financial resources, which can make it challenging for them to escape an abusive situation or provide for their families. It's critical to understand financial abuse's warning signals and ask for assistance from dependable family members, friends, or experts. We can fight to stop financial abuse and advance a safer and more just society by increasing awareness about financial abuse and helping victims.
References:
https://www.fca.org.uk/insight/hidden-harm-financial-abuse