Financial abuse can be subtle but harmful. MoneyMagpie Editor and financial expert Vicky Parry explains how to spot the signs and what you can do about it
Ten years after financial abuse became an official crime, it still affects over nine million people in the UK each year. While it affects people from all ages and demographics, the most prevalent is women, with one in six claiming they have suffered economic abuse in a relationship.
But what is economic abuse, and how can you spot the red flags before it’s too late?
What is financial abuse?
Financial abuse is when someone controls the finances of another person to their own advantage and the disadvantage of the victim. This is usually done by intimate partners, but can also be family, friends, or people in a support network as trusted individuals.
It can come in several forms. It might be forcing someone to take out credit or loans in their name for the perpetrator. It could be insisting on having a joint account and removing all the money into their own. Or, it might look like financial irresponsibility of one person so the other is required to put themselves into financial difficulty to pay bills on their behalf. For example, someone might deliberately spend all their money on payday on luxuries for themselves, so their partner has to foot the full bill for the mortgage.
For some people, financial abuse looks like their benefits are paid to a ‘responsible adult’ who then does not use the money as they should on the intended recipient. Others might find they are pushed to have their salary paid into someone else’s bank account, from which they are given a small ‘allowance’.
Why does financial abuse happen?
Financial abuse happens in 99% of domestic abuse cases. It is a way of controlling the victim, as they are unable to spend their money as they wish, making it hard for them to make plans to leave.
Sometimes, people are unaware the abuse is happening. There have been some high profile cases over the years of trusted carers taking advantage of vulnerable adults with dementia or other health conditions, spending the victim’s money as if it were their own. These cases are particularly hard to spot, as the victim is often already very isolated and will not be able to tell if their finances are in order.
Seven financial abuse red flags
You might not realise you are experiencing financial abuse, as it often starts small. If you or a friend is experiencing any of these situations, it is a warning sign for economic abuse that needs to be addressed.
Insisting someone take out credit in your name
You should only ever take out bank accounts, credit, loans, or any financial product in your name if it is for you. If someone asks you to set up an account for them under your name, this is fraudulent. It also means they can rack up massive credit card or loan debts and you are the one responsible for repayments.
Asking for income to be paid into their account
If someone suggests that your income should be paid into their account, refuse. This is a sign that they want to control how much money you have access to. They might try to tell you that you have a spending problem – but unless you’re the one asking someone to help you with such an issue, do not do it. Once the money is in their account, they can spend it how they want and don’t have to give it back to you.
Tell you to work less hours than you want
Only you can decide how many hours you are capable of working depending on your own health, financial, family, and work circumstances. If someone tries to make you work fewer hours than you want to or are capable of, this is an attempt to restrict your earning power.
They check your spending all the time
Sharing details of expenses that come out of a joint account is fair enough – and should be standard practice to ensure both parties know the account’s status. However, if someone is always checking your receipts, insists on you keeping a spending diary, or demands justification of each purchase, this is controlling and abusive behaviour.
Restricts the use of your own items
If someone takes away your mobile phone, car, or other assets that are yours, or unfairly uses a joint asset to deprive you of its use, this can be financial abuse. It impacts how you can earn and spend your money.
Wants your banking passwords
Never, ever give someone your card PIN or banking logins. Only you should have access to your bank accounts, unless there is a specific reason YOU have decided someone needs to help you control your money. An example might be if you have asked for help paying bills while you tackle a long-term illness that may cause you mental confusion or fatigue. Even in these cases, it is safer to set up a new account and put some money into it for them to manage your life admin, rather than giving full bank access.
Spends all of their money to deprive you of yours
This is one of the most insidious types of financial abuse but it unfortunately happens a lot. A person could deliberately fritter away their money, leaving the victim to be responsible for paying bills (or face debt). Or, they tell the victim that they have no money or less than they actually have, to manipulate them into paying for everything.
How to get help for financial abuse
Financial abuse is one of the trickiest situations to get out of, because it makes it very difficult to save any money for an escape plan. If you feel safe enough to discuss the situation with the perpetrator, do so. However, many situations are dangerous to do this in if the victim is concerned about retaliation. In this case, reach out to domestic abuse charities or the Surviving Economic Abuse charity for assistance.
Try to speak to your bank and credit card providers to let them know your account may be at risk of someone else trying to access it, if someone has asked to take credit out in your name. You should also check your credit record to make sure they haven’t already done so without you knowing.
Speak to a trusted friend or family member if you can, to form an action plan. They may be able to help you find a place to stay safely while you put steps in place to distance yourself from the person abusing you.
If you think someone is being financially abused
This can be a tricky topic but it is important to speak up if you think something is wrong. Many people either are unaware that financial abuse is a crime, or they are too scared to say something. Opening up the conversation first can lay the first steps to them seeking help and breaking away from the person abusing them.
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