Australian’s often hide their finances from others – we don’t usually tell people how much we earn, or the value of our portfolios. This secrecy leads into a form of abuse that is often hidden. At least at first.
There is no exact profile of a financial abused victim. We often revert to the elderly as key targets, mainly from the media hype and an assumption that their age and deteriorating health makes them more vulnerable.
In fact, it is the opposite, with millennials having a greater likelihood of experiencing financial abuse (ABS Survey, 2012).
So what is it? The definition of financial abuse is relatively new. In short, it means a loss of financial independence by someone manipulating and controlling your finances, leading to intimidation, isolation and stress. Root causes include power, greed and poor investment decisions.
It can include forging loan documents, stealing to pay bad business or personal debts, taking advantage of powers of attorney, maxing out credit cards in your partner’s name, refusing to work or pay bills, forbidding your partner to spend, or the most common – hidden bank accounts.
Unfortunately, financial abuse is often the start of other forms of abuse, such as verbal, emotional and physical. Whilst financial abuse is not recognised as a criminal act, it can certainly lead to crimes such as forgery and assault.
One in four women have experienced financial abuse by a partner, with men at one in seven (ABS Survey, 2012).
Complete prevention is impossible, given the hidden and deceptive nature of the abuse. However, common signs to be aware of include:
- Control or dominance by a person, meaning a lack of control from the victim
- Separate and hidden finances
- Restriction to accounts and transactions; no joint accounts
- Forbidding of work or study to progress careers
- Financial pressure such as running up debts, not paying utilities and not contributions to household expenses
- Double standards – it’s ok for one to spend, not the other. Needing to ask permission
- Lack of communication and seeking joint decision making
- Lies, which is often the beginning of the end
Financial literacy is key. Increasing your knowledge, or seeking professional advice, can limit the damage, both financially and emotionally. We can never completely prepare for the unexpected. Yet, the biggest step is the first one, and this may simply involve removing yourself from the situation at hand. Having access to family, friends, colleagues and professionals can help provide support during this time, and the rebuilding phase.
Awareness was recently raised via the Royal Commission findings, and the 2018 Federal Budget via the allocation of $22M towards elder abuse. This may be a start, but much more needs to be done.