Around 2 million Australians will experience financial abuse in their lifetime, but many people don’t even recognise it’s happening.
It’s a problem that requires a concerted effort by Australian lenders and policymakers to solve, Commonwealth Bank group executive of human resources Sian Lewis believes.
Financial abuse ranges from micromanaging someone’s budget, to taking out loans in their name, forbidding them from work and lying about joint financial situations.
It can be subtle but it is often a precursor to domestic violence, and among women who have experienced intimate partner violence, 99 per cent have also experienced financial abuse at some point in the relationship, published in the Violence against Women journal found.
“It’s difficult not to be concerned when it [domestic violence] has been a subject of national debate for a long time, but it never seems to go away and remains at such incredibly high levels across society,” Lewis told Yahoo Finance.
What’s the definition of ‘financial abuse’?
However, one of the key challenges the bank - and its customers - have faced was landing on a definition of what financial abuse actually was.
That’s where Commonwealth Bank decided to start, Lewis said.
“Many of us will be in relationships where one or the other member of the relationship takes a greater role in the finances,” she said.
“Recognising when a perfectly healthy division of labour turns into something a bit more sinister - that could be the signs of escalating abuse to come.
“It’s a really important area for us to talk about openly, speak to our customers about and help them to recognise it if it’s happening.”
What are the warning signs of financial abuse?
It includes 12 questions people should ask themselves to pick up on the warning signs that something isn’t right.
Has your partner ever prevented you from getting a job or going to work?
Have you been asked to perform tasks or ‘favours’ in exchange for money?
Does your partner refuse to pay child support or help with childcare? And,
Is your opinion ignored on major financial decisions?
The transition into financial abuse can be a series of small, innocuous changes, Lewis said.
There’s a difference between working together to make decisions about retirement or purchasing a property and requiring one partner to have their purchases - down to daily cups of coffee - managed.
Unless it’s a conscious decision by both partners to monitor their spending, that sort of budget micromanagement can often lead to a situation where individuals’ allowances get smaller and smaller, Lewis said.
“The starting signs of that is, do you know where your money is going? Do you have good conversations about where your money is going? Do you feel that you can - within the presets of your budget - spend for a reasonably independent life?”
But, she added, it can also present in the opposite way.
For example, if someone asks their partner about their joint financial situation and is told, “Don’t worry about that,” that can also be a warning sign.
“It could also be being asked to take out a loan or credit card in your name, when you know you’re not going to get the benefits. We often have people who are taking out personal loans for cars that they don’t get to use, but their partners do.”
What can my bank do if I’ve experienced financial abuse?
It’s critical that couples have open conversations about their finances, and Lewis suggests couples put in place a regular time every month where they look at their finances.
But in the event that the situation has already progressed to fully fledged financial abuse, she reminded Australians that there are a couple of things their banks can immediately do to help.
“In an emergency situation, one of the first things we can help with is to secure funds that they have an entitlement to in their current bank accounts, and give them a picture of what their current situation is if they decide to leave a violent relationship,” she said.
Banks can also open new bank accounts for people who don’t have their own, and assist with mortgage deferrals and other financial support.
What other services are available to financial abuse victims?
One of the key challenges women face when leaving an abusive partner is a lack of understanding of the resources available and how to access them.
Every year, 9,120 Australian women will become homeless after fleeing violence, while 7,690 will return to their partner as they have nowhere else to go.
This is where Lewis believes banks have a powerful role to play in assisting survivors to access resources.
The bank has had a key focus on addressing financial abuse since 2015, and launched its financial abuse service Next Chapter with Lewis in September 2020.
Next Chapter has three focuses: support, advocacy and prevention.
Financial abuse can also show up in partners who make it difficult for someone to succeed or attend work, or even get a job.
The partnership recently helped its 1,000th female customer gain employment after experiencing abuse.
Financial counselling and support for all Australians - not just CommBank customers
The bank has also partnered with female-targeted financial support service Good Shepherd to launch its Financial Independence Hub.
The hub is a specialised service for people recovering from financial abuse, and is offered to all Australians - regardless of whether they are a Commonwealth Bank customer.
“The hub actually helps people to get back on their feet. They have legal issues very often in terms of ensuring they have support for the children,” Lewis said.
“The feedback from victims and survivors is that it is a really challenging journey. They have to deal with all of these different agencies, they don’t know what they’re entitled to.”
The hub provides financial coaching, referrals to other support services and no-interest loans.
And it provides a financial counsellor who delivers whichever service the customer needs, whether it’s support in accessing other agencies or navigating the financial or legal system.
“[Banks] really need to move beyond their own customers, and - to date - I don’t think any other establishment has,” Lewis said.
“[There’s a] fragmentation of effort. But if we stay within our own four walls, we can really only deliver to Commonwealth Bank customers, and other institutions can only deliver to other customers.
“It requires a great deal of will and effort to provide a service to all Australians, and not just your customers.”
Do you need help now?
1800 RESPECT (1800 737 732)
Lifeline 13 11 14
Police - 999
Commonwealth Bank Community Wellbeing specialist - 1800 223 387
Take control of your money and learn to maximise it with the Women’s Money Movement! Join the club on LinkedIn and follow Yahoo Finance Australia on Facebook, Twitter and Instagram, and subscribe to the Women’s Money Movement newsletter.