Until recently, financial abuse was often kept secret, especially where it occurred within the family. Thankfully that’s changing with public awareness campaigns and help becoming more readily available.
The emotional and economic damage caused by financial abuse can be far reaching and devastating. A recent Australian report calculates that in 2020 alone, financial abuse victims lost $5.7 billion while the cost to the broader economy was $5.2 billion.i
Nearly one in 30 women and one in 50 men suffer financial abuse each year, according to the Deloitte Access Economics report The Cost of Financial Abuse in Australia, 2022. These figures are almost certainly an underestimate, the report adds.
There are no typical victims of financial abuse: those affected are of all ages and means. Sadly, the abuser is often a friend, carer, partner or family member.
What is financial abuse?
Financial abuse is when someone uses your money without your permission, prevents you from getting access to money or takes charge of your financial decisions.
These days, financial abuse is considered a form of domestic and family violence, taking away your independence and leaving you feeling vulnerable and anxious. Victims may also suffer physical violence and emotional abuse.
The most common type of financial abuse is withholding income or controlling how it is spent, according to the Deloitte report. But there are other forms of abuse that can be equally harmful such as making a partner liable for a joint debt, preventing someone from working, refusing to contribute to household expenses and refusing to contribute to the costs of raising a child.
Many victims also suffer flow-on effects of the abuse such as financial hardship and stress, leading to mental health issues. Some may also lose their home.
In some cases of family violence, one partner takes control of the couple’s finances, preventing the victim from leaving the relationship. In others, where the victim does manage to leave, the abuser may continue their abuse using tactics such as expensive legal action or disrupting the victim’s work or business.
Recognising the signs
Victims of financial abuse may not be aware of the abuse for some time, allowing perpetrators to empty bank accounts, deplete investments and incur large debts in the victim’s name.
The federal government agency, Services Australia says the warning signs include:
taking or using your money without your permission
not being allowed to work
having to account for how you spend your money
withholding financial information from you
spending any government payments you receive without your consent.ii
Incurring debts in your name is another form of financial abuse. Your partner may spend more than you agree on your credit card, pressure you into co-signing a loan with them, or take out a loan in your name, according to Australian Family Lawyers.iii They may also limit your educational opportunities by, for example, preventing you from enrolling in studies that could advance your career.
Older people and those living with disability can be particularly vulnerable to financial abuse if they rely on others for help and advice. Financial abusers may take money from their bank accounts or wallets, ask an older person to change their Will, take jewellery or other valuable items from their home, or take control of their decisions using a Power of Attorney when they are still capable of making their own decisions.
Where to go for help
If you or someone you know is suffering financial abuse, a number of free and confidential resources are available.
The MoneySmart website provides information about free legal advice at community legal centres or legal aid centres, and a number of suggestions if you need urgent help with money.
You can also find free and confidential counselling for family violence, abuse and sexual assault at: 1800RESPECT (24 hours a day, seven days a week)
1800 737 732
For crisis support, contact Lifeline (24 hours a day, seven days a week)
13 11 14
We understand that it can be difficult reaching out for support if you feel you or someone you love is being taken advantage of financially, especially if a family member is involved. Please call us on (07) 4041 6777 if you would like a confidential discussion about safeguarding your finances.