Financial abuse is little recognised. But it’s serious. Many people are unaware that controlling someone’s money or limiting their economic freedom is in fact a form of domestic abuse.
It may not be as visible as physical violence, but exerting financial control can trap victims in abusive relationships by isolating them from friends and family, or cutting them off from the money they need to leave.
And the damage of financial abuse can continue long after the relationship is over. Victims can be left in dire financial straits, liable for debts they never agreed to, and at the mercy of the perpetrator who can still control and access their money.
The Home Secretary’s recent announcement that the government will seek to make “coercive control” illegal, marks a shift towards national recognition that domestic abuse is not just physical. It’s time that psychological, emotional and financial abuse was put on the same legal footing as physical abuse.
A new Citizens Advice report shines the spotlight on the hidden prevalence of financial abuse: nine in ten advisers contributing to our research have helped people with such cases in the last year.
One of the most common forms is where individuals have been forced by their partner to take out loans on their behalf: almost three-quarters of the advisers who responded to our survey have helped a client who has taken out credit and gone into debt as a result of pressure from their partner. Yet too often, high street banks and other lenders fail to acknowledge that their customer may be subjected to this type of control.
Earlier this year, a young woman came to Citizens Advice seeking help with almost £10,000 of debt. She had left her home and marriage because of the abuse she suffered from her husband. Following physical abuse and threats in the relationship, she had been forced by her partner to take out a number of debts in her own name, passing the money onto him. These included bank loans and credit cards, as well as acting as a guarantor for his loans.
Banks and other lenders have a big role to play in tackling this problem. While there is some good practice, the majority of banks and creditors fail to recognise the needs of those customers who fall victim to this type of abuse.
Of course it is a difficult area. It is not easy for a company to investigate behind the privacy of closed doors. Nor is it straightforward for victims to approach companies to try to untangle themselves from these sorts of financial ties.
Up until this point, statutory and self-regulators in the financial services industry have done little to ensure banks, lenders and other financial institution have a set of guidelines to help. This needs to change if victims of the kind of coercive control highlighted by Theresa May and our report are to be supported.
It is time financial abuse is addressed. The political will to do so is there: all three of the biggest political parties have pledged admirable commitment to eliminating abuse. It is time action is taken to prevent it and to help support victims to get back on their feet and on with their lives.
Government and financial professionals must work together to develop the framework so urgently needed to protect individuals at their most vulnerable.
Imogen Parker is Senior Policy Researcher at Citizens Advice and is leading the charity’s research into domestic abuse. She tweets @ImogenParker