10 signs that someone you love is being financially abused
Financial abuse can be a standalone form of abuse, but it's also prevalent in about 90% of domestic violence situations. The truth is that not only is financial abuse common, it can be hard to spot because it occurs in many different forms.
Self-isolation and stay-at-home requirements have exacerbated domestic and financial abuse and, unfortunately, it is difficult to monitor in these circumstances.
But this is a good time to think about how to help in such cases when we can.
According to financial adviser Amanda Cassar, co-founder and director of Wealth Planning Partners, victims of financial abuse might not immediately recognise what is happening, as it can occur gradually over a long period of time.
However, specific behaviours around money are red flags and these could very well alert friends or colleagues that something isn't quite right.
If you have reason to suspect that a loved one is at risk of financial abuse, it is important to take care when expressing your concerns. Avoid criticising their partner or family member as this may only make them more at risk of being abused. Simply point out any patterns that have raised your concern, ask for their views and offer your support.
It can happen to anyone
Financial abuse might be present when there's one partner constantly checking up on another, asking why they spend so much, why the groceries are so expensive and did they really need to buy that item, says Cassar. Or it may occur when one person controls the credit cards.
"I've seen it in every age group, 20s, 30s, 40s and 50s, but more so in the 20s and 30s because they're keen to find that one person in their life and keen to settle down, they're still building their wealth and assets and it seems a good idea to do it together," she says.
"One client I saw, who loved her husband dearly, found out when he died that he had gambled away everything, including her super. She was in her 60s and he handled the money and they were wealthy. But what she didn't know until he passed away was that he had access to everything. If he hadn't died when he did, she would have been homeless."
Cassar says she has heard of cases where a spouse didn't realise they were financially abused. One was a woman in her 80s who was always handed cash by her husband, also in his 80s.
"One day he was interstate and had a heart attack while visiting his secret second family - a second partner and child," she says. "His wife never had access to a bank account and didn't realise it had been deliberately hidden from her because she was always financially taken care of."
Another case involved a man working in a fly-in, fly-out job and when he came home from the mines to see his wife and play with the kids he had no idea that she had been siphoning off money he had entrusted to her. He didn't realise he was the victim of financial abuse, says Cassar.
Love's high price
Financial counsellor and educator Lisa Simpson tells people to safeguard their name. "It doesn't matter how much you love somebody, don't go into debt for them," she says.
She says it's recognisable as financial abuse when the debt is in a person's name but there is no benefit to that person.
For example, young girls may take out a phone contract for their partner. "They say it's because he can't get a phone because he has a bad credit report," says Simpson. "They tell me, 'But I love him so much I want him to call me', then he runs up a $3000 bill."
Simpson says often people say their partner (who they have gone into debt for) has money.
"The other day I met a client who has found a new boyfriend. I said, 'Please be really careful,' but she says he's great and he's good with money. Then when I'm doing her budget she says she owes the vet $1000 for his dog."
"I said to her, 'You're the single mum on a pension, why are you paying?' Love is very blind."
10 signs your friend is being financially abused
- Their partner who limits employment options, even forbidding particular types of employment or working with other people.
- Their partner forbids study or the opportunity for your friend to better themselves.
- Their partner withholds money or only provides your friend a small allowance.
- Basic living resources including medication and food are withheld.
- Your friend's purchases are monitored extremely closely, including checking receipts.
- Your friend is experiencing 'period poverty', which means women with no access to sanitary products are forced to stay home.
- Their partner threatens to cut off financial support if your friend doesn't meet all demands.
- Their partner hides money from your friend.
- Their partner does not allow your friend to have a bank account.
- Their partner racks up debts in your friend's name.
How a conman operates
"Intimate fraud" is what Tracy Hall calls the type of abuse her boyfriend of 18 months, Hamish McLaren*, or Max Tavita as she knew him, caused her with his deceit and theft of her superannuation.
Max's life revolved around a complicated web of lies. He told Tracy he was the chief investment officer of an investment company, and conducted many phone calls in her presence where he convincingly discussed financial strategies.
He would drop her at her office in town before heading to his own a few streets away - it turned out it didn't exist.
"We were planning a future together. He appeared to care about me and my wellbeing and because he was in the financial field I had no reason to distrust him. He told me he wanted me to be financially independent and secure. I fell hook, line and sinker," says Tracy.
Now she finds it hard to trust anything.
"Everything was so well constructed. He had pages and pages of detailed documentation which looked legitimate. I believed he had my best interests at heart, but now trust is a hard one. After that experience, I didn't even trust myself, my intuition, my judgements. "
Hall lost all her superannuation - 22 years' worth - by trusting Max to invest it for her. "It was my future and my past," she says.
Today she believes if she had had a financial adviser she would have run it past them. It may have stopped her investing through Max.
Other tips that she says might have protected her include:
- Be suspicious of anyone without a digital footprint. (While Max had no footprint, there was a footprint under Hamish McLaren. However, Tracy was unaware of this.)
- Never give investment money to anyone who isn't a registered financial adviser.
- Make sure when you invest that the documentation from the provider is clearly in your name.
- Don't mix money and relationships. However, this is difficult if you are building a life together, which Tracy thought she was.
* Hamish McLaren (or Watson) was the subject of a 2019 podcast called Who the Hell is Hamish?.
Marion Mays' 10 tips for fighting financial abuse
- Create a master document of all suppliers such as insurances, utilities, bank accounts, loan information and subscriptions including website/phone/email, log-in details and passwords to instantly access all your financial information.
- Document via email to a third person all the ways in which you believe you are being financially abused. Be clear and concise as this becomes an important document for future use with banks and courts.
- Order a copy of your personal credit file and put a monitoring alert on it.
- Gather all information about your partner's financial situation and document it, email it to a third party or a different email address.
- Set up a new web-based email address that your partner doesn't know about.
- Seek professional help.
- Set up a Dropbox or Google storage folder with a copy of all documents in it, send the link to the professionals helping you.
- If you are the primary account holder for credit cards and/or utilities, you need to make sure all accounts are paid up to date and find a way to move the accounts out of your name. As the primary account holder, you will be liable for all the debt.
- Open an account that's inaccessible to your partner, so you have funds to leave if necessary. Have any income deposited into this account and save for your future needs.
- Depending on the relevant facts, you need to write to all your financial institutions telling them you are being financially abused (use your new private email address only) and put the organisations on notice. This way they will be more accommodating in future if you need to freeze payments or enter into special agreements. Specifically request the organisation provide you with support for financial abuse and make sure it is documented that
- you have done this.