What Is Financial Abuse and How Can I Protect Myself?
Domestic violence does not always result in visible bruises or physical harm. Abusers often use subtle forms of abuse that are less obvious to the public. These are different means to the same end: the intimidation or control of a victim.
Don't feel alone if the following domestic violence examples sound familiar. Financial abuse is a common form of abuse that persists behind a mask of traditional gender roles around money.
Tactics include concealing information from the victim and limiting the victim's access to family bank accounts.
Read more to learn the signs of financial abuse, including those many consider "the norm."
This information could help a victim break free from their abuser's cruel hold.
Examples of Financial Abuse
Research suggests that 98% of domestic violence cases involve financial abuse regardless of the parties' socio-economic status, educational attainment, or ethnicity.
Regardless of the victim's identity or the amount of money, the abuser intends to control the victim's finances and prevent them from leaving the relationship.
Examples of financial abuse include:
- Forcing the victim to commit fraud
- Accumulating debt on the victim's accounts
- Withholding the victim's child support, spousal support, or public benefits, such as social security
- Stealing the victim's identity
- Coercing the victim into working in a family business and withholding payment
- Refusing to pay bills to damage the victim's credit score
- Prohibiting the victim from advancing academically or professionally
In a State like California, many of these actions are a breach of a spouse's fiduciary duties to the other spouse. Depending on the State, these actions may also be a crime.
Signs of Financial Abuse
As clever as abusers think they are, their abuse tactics are rarely original and often follow a pattern. Knowing the signs of financial abuse could help a victim safely exit as soon as possible.
Some abusers use violence, threats, or intimidation early on in the relationship to prevent the victim from earning an income or spending money.
In many cases, abuse gradually escalates from covert manipulation to aggression.
For instance, an abuser might say, "You seem overwhelmed right now. I want to lighten your workload by organizing the finances. I'll give you money weekly to cover everything you need."
The victim may not detect any red flags because the statement reads as helpful.
Once the victim agrees, the abuser will gradually reduce the victim's weekly allowance. The victim may only recognize the financial abuse once they are entirely financially dependent on their abuser.
Other signs of financial abuse include:
- Coercing the victim to sign financial documents
- Forcing the victim to quit their job
- Prohibiting the victim from going to job interviews
- Refinancing a loan without the victim's consent
Financial abuse is not unique to intimate partners. A friend, care provider, or family member could perpetrate financial abuse against a victim.
Approximately one in five people aged 65 and older in America are the victims of financial abuse and lose up to $36.5 billion to economic abuse annually from economic exploitation, fraud, and caregiver abuse.
Effects of Financial Abuse
Abusers choose to financially abuse the victim to effectively limit the victim's options of ever exiting the relationship and surviving independently.
Leaving a financially abusive relationship requires courage and a robust safety plan that factors in the short and long-term consequences of economic abuse.
Initially, the victim may not have the funds to cover housing, childcare expenses, healthcare, or even meals.
A victim that survives these short-term obstacles still faces long-term uncertainty.
The scars of financial abuse are not on the victim's body but their personal records. These scars include a poor credit score, legal issues, and little to no employment history.
Like all forms of domestic violence, financial abuse will likely cause the victim psychological harm
Domestic violence victims are twice more likely to make multiple suicide attempts than individuals who have not experienced abuse. Additionally, over half of domestic violence victims are diagnosed with a psychiatric condition.
Society feels the economic effects of financial abuse and other intimate partner violence due to increased social services and law enforcement costs.
Research indicates that domestic violence results in a net productivity loss of $1.14 billion and 7.9 billion working days every year.
Financial Abuse Prevention
Victims can take steps to protect themselves from the worst consequences of financial abuse, such as:
- Maintaining photocopies of essential documents in a safety deposit box that is inaccessible by their abuser
- Putting aside money, such as secretly saving change from purchases
- Withdrawing at least half of the funds in joint bank accounts as soon as they leave the relationship
- Accumulating a personal credit history
- Legally changing signature authority on any joint accounts
Spreading awareness helps hold abusers accountable and allows victims to proactively safety plan.
How to Escape a Financially Abusive Situation
Victims have many reasons to feel apprehensive about leaving a financially abusive partner no matter how terrible he or she is.
The good news is that countless victims have successfully left their abusive partners. Their escape can be replicated by victims and facilitated by a support system.
The following escape strategies are also applicable to abusive situations with friends and caregivers:
- Consult with a domestic violence advocate or family law attorney
- Reset all your passwords
- Save all financial information on a secure hard drive inaccessible by the abuser or securely email it to a secure email address you set up
- Use a reputable password manager the abuser cannot access
- Obtain a copy of your tax returns
- Ask a friend to be an authorized user on their credit card
- Close any joint credit cards with a zero balance
Support for Victims of Financial Abuse
Abuse wreaks havoc on the victim's mind, body, and spirit. It is financial cancer and like any other cancer, abusers should seek treatment from professionals who can strategically develop and execute a safety plan.
An effective support system includes:
- Domestic violence advocates
- A family law attorney
- A licensed psychologist
- Compassionate friends and family members
- Online or in-person support groups for survivors
Domestic violence advocates can help the victim limit their contact with an abuser and safely exit the abusive relationship. They can create safety plans, offer immediate assistance, and connect victims with shelters and emergency services.
Unlike an advocate, a family law attorney can provide legal advice and legally represent the victim in court.
An experienced attorney could help a victim secure favorable results regarding asset division and child custody issues in their separation or divorce case.
A psychologist could help a victim process trauma, cope with stress, and manage expectations with others.
A support system can only assist a brave victim ready to regain their financial independence and life.
The power to heal and break the cycle of domestic violence lives inside each person suffering abuse.
We hope you enjoyed this article. This article is not legal advice.