The instigator’s tactics can include anything from subtle manipulation to outright threats and theft. This can include limiting access or hiding money or assets from the victim.
Financial abuse often goes hand in hand with other forms of abuse such as emotional and physical abuse. Signs of abuse are not always obvious to those outside the relationship, and there are also situations where the victim is unaware that they are being financially manipulated.
While the majority of victims are women, men are also victims of financial abuse. In fact, one in five women and one in seven men have experienced financial abuse. It crosses all socio-economic groups, races, and education levels. Financial abuse occurs in 99% of domestic violence cases. In addition, the Covid-19 pandemic greatly increased the risk factors for domestic violence and, along with it, the incidence of financial abuse. Rates of reported domestic violence cases rose in the USA by 8%.
It has been shown that the most dangerous time for a woman in an abusive relationship is when she decides to leave. Often this is the time that financial abuse peaks in a relationship in an effort for the abuser to retain control of the victim and their situation, although financial abuse can occur throughout the relationship as well.
Financial abuse is a very effective way of keeping an individual in a relationship or situation. Without funds, the victim has limited means to move on from the relationship. This may include an inability to pay for housing, food, and childcare outside of the current relationship with the abuser. Lack of access to funds can also limit the ability of a victim to maintain these basic life needs long enough to establish stability, causing them to return to the abusive relationship.
Types of Financial Abuse
Coercing a partner to reluctantly enter into a credit agreement, for example, to purchase a new, fancier car than they would like is a form of financial abuse. The abuser may enter into credit agreements themselves and expect the victim to shoulder the financial burden of that debt either partially or completely.
Abusers may also use their victim’s social security numbers and other identification to open credit cards, running up huge debts in their victim’s name. In fact, stealing someone’s identity, assets or inheritance are all forms of financial abuse.
Often financial abuse begins very subtly with a partner offering to take care of the finances for the relationship. Gradually their control of the finances can become absolute, resulting in the abuser providing an ‘allowance’ for the victim or requiring them to account for every penny spent, even when the victim has earned the money themselves. The victim may find that the bank accounts have been changed or that they no longer have access to their accounts. Investments may have been made without their consent or inclusion in decision making.
Withholding funds for necessities such as children’s basic needs and other household basics is another way financial abusers retain control of their victims. Often, during divorce proceedings a partner may hide or fail to disclose assets causing financial hardship for the victim as they try to establish a new home with their children.
Abusers may prevent victims from working outside the home, limit their access to workplace training, or sabotage their chance of career progression via intimidation, threats or subtle manipulation. Victims could also be forced to work for free in a family business with no chance of earning for themselves or creating a career path of their choosing. Limiting the career and work opportunities of the victim also limits their power within the relationship. Abusers may resort to physical violence to prevent their victim from performing well at meetings or in job interviews. Victims may feel their only alternative is to quit their job, leaving them even more vulnerable to abuse.
Senior Financial Abuse
The elderly are particularly susceptible to financial abuse. This can come at the hands of seemingly well meaning caregivers, or even the victim’s own children. It can be difficult to detect elder abuse as the individual may not be aware that their assets are being stolen. Abusers may coerce or threaten their victim into signing Power of Attorney documents, giving financial power to the abuser to access bank accounts and assets.
There are cases of adult children or caregivers stealing government benefits, leaving their victim with not enough money to provide for their basic needs such as food and medicine. Families should keep an eye out for signs of elder financial abuse such as fearfulness of an individual, lack of funds to pay bills, unexplained withdrawal from accounts, or missing personal items.
The Impact of Financial Abuse
Financial abuse can prevent a victim from obtaining safe housing for themselves and their children. With the threat of homelessness looming, many victims may choose to return to their abusers. It may take several tries before they are able to make a break from the situation safely. Even then, they can face years of hardship as they work towards rebuilding their financial lives. Victims may need to overcome inconsistent work histories, bad credit, and legal problems over several years.
What to do if you’re being financially abused
Leaving an abusive relationship is the most dangerous time for the victim. Creating a plan of action well in advance can help mitigate some of the safety hurdles.
An escape plan will have several parts. First, find a trusted friend or family member who you can turn to. Even without the support of a person close to you there are other alternatives such as an emergency domestic violence shelter (U.S. National Domestic Violence Hotline at 1-800-799-7233).
If you can save any money in the form of cash, do so. Keep it in a safe place that your abuser will be unlikely to find. If you’re still working, open a new bank account and have your pay deposited into the new account; but leave this step until you are ready to leave the relationship.
Gather all the documents you can that relate to your finances and your identity. These should include medical insurance cards, birth certificates, passports, bank statements, and loan documents. Don’t forget to include your children’s identification and social security cards as well.
What to do once you have left the relationship
Find financial education resources to help you understand where you stand financially. A lawyer can help you obtain court orders that provide access to funds to live on (and to pay the lawyer, especially in the event of a divorce). You will also want to consult with a Certified Divorce Financial Analyst to help understand where any funds are being held and to gain access to what is rightfully yours.
A credit counselor can assist with helping you to understand your financial options and, when appropriate help you set up a Debt Management Plan to help pay off your debts in an affordable way. They can also provide budgeting information and other helpful resources.
There are many reputable sources of free personal finance information online. Read all that you can to increase your confidence with managing your money safely.
Monitor your credit score regularly and examine your credit report at least once a year to ensure that there are no accounts opened in your name that you are unaware of. You can get a free copy of your credit report each year from annualcreditreport.com. Report any errors to the three credit bureaus. You can put a freeze on your credit report to prevent any new accounts being opened without your consent.
It may take several years to gain financial stability; however, the journey will be worth it.
All great info to know. I know how hard it is to leave an abusive relationship. Most people dont understand. My heart goes out to all these women that it happens to.