Taking steps to stop domestic violence — whether it affects you or a loved one — is a difficult and unsettling experience. It can be especially challenging in cases of financial abuse, which may be hard to identify and address. Financial abuse impacts many people in dysfunctional relationships, having a severe impact on the mental and financial well-being of those affected.
How does financial abuse impact victims, and what can you do to address it? If you or a family member are being victimized by this type of abuse, read through this guide to grasp this complicated topic and understand your options for stopping it.
Financial abuse is all about control; it involves manipulating a victim’s capability to earn, keep, or spend money. This can mean preventing a victim from maintaining employment, having access to their own bank accounts, or from even purchasing basic necessities. The extent of this control can go far beyond this, encompassing countless other methods of abuse. Financial abuse can deteriorate relationships and damage the credit scores of victims.
Also known as economic abuse, this is recognized as a form of domestic violence. It very often goes hand in hand with other forms of domestic violence; in fact, 99% of cases involving emotional, physical, or sexual abuse also involve financial abuse. Given that domestic violence is primarily about total control, this statistic is an unfortunate but not unexpected finding.
Financial abuse is a major concern because it restricts a victim’s freedoms and ability to escape abusive situations. To understand the scope of this problem, consider the following statistics from the National Network to End Domestic Violence:
It is clear that financial abuse is a widespread and prevalent concern. It has a severe impact on those affected, often rendering them incapable of getting out of harmful relationships. Without the ability to earn money or access financial services, victims are powerless to change matters for the better.
While the above section provided a few examples of financial abuse, there are many other examples that can illustrate how it may look. If you’re unsure whether the behavior you’ve witnessed constitutes financial abuse, read through the examples below. If one or more examples is similar to what you’ve encountered, you’ve likely identified financial abuse in your life.
Of course, this short list does not encompass every possible method of financial abuse. Note that the specific methods employed will vary based on the type of abuse — and that is largely defined by the nature of the relationship between the abuser and victim.
Financial abuse can come in many forms, affecting victims in a wide variety of relationship types. The most common scenarios include domestic violence in dysfunctional marriages, against seniors, and by parents against their children. Below, you can read more about each of these scenarios:
There are many problematic methods of financial abuse that may occur within a marriage. An early warning sign of potential financial abuse in a marriage occurs when a spouse “takes charge” of the couple’s finances. It’s natural for newly married couples to change how they handle money, but financial abuse takes this notion to extreme, unhealthy lengths.
The abuser may make demands for their partner’s paycheck, then give them a small allowance. They’ll also frequently ensure that only their name appears on savings accounts, deeds, and any other major assets. In line with the examples in the above section, they may also file fraudulent documents or attempt to sabotage their partner’s career.
The net result of these methods is that the victim cannot reasonably leave the marriage due to financial reasons. These tactics enable the abuser to commit physical, psychological, and sexual assault against their partner while depriving them of any method of recourse or escape from the relationship.
Over time, this type of abuse can deteriorate a marriage and lead to severe short- and long-term effects on the victim:
If a family member, friend, or caregiver makes efforts to control the finances of a senior — whether to inflict harm or personally profit — that behavior may be considered senior financial abuse. As they often live on a fixed income or may have impairments preventing them from identifying or stopping abusive behavior, seniors are a vulnerable population when it comes to scams.
There are many warning signs of potential senior financial abuse. When looking at bank account statements, you may see large or frequent charges that are unexplained. Further, there may be ATM withdrawals from a senior citizen who does not typically use a debit or ATM card. An abuser may open a joint account with the victim or open new credit cards or loans in their name. As a result of these methods, the senior may have unpaid bills or may be unable to pay for medical care.
Seniors can face a number of effects as a result of this type of abuse. This includes:
The final type of financial abuse we’ll discuss in this guide is of parents or guardians against their children. Because parents often have complete access to their child’s finances, they have many opportunities to exploit them for personal profit. This type of abuse can take several different forms:
Warning signs of financial abuse by parents include inexplicable open accounts on credit reports, the concealment of letters or emails related to finances, or unexplained increases in wealth or spending sprees. These behaviors are often motivated by greed and, sometimes, a desire to exert control over children.
When parents profit off their children through fraud, it can severely strain familial relationships, ultimately rendering the family dysfunctional. This form of abuse may also have dire impacts on the financial health of a child. Because it can go on for so long undetected, parental financial abuse could severely restrict a child’s future opportunities. They’ll need to go through a laborious process that involves filing a police report, contacting credit bureaus, and identifying precisely what accounts were opened fraudulently.
You can read about the harm financial abuse causes, but how do you identify it? There are many signs of financial abuse, and they are generally related to the control of spending, sabotaging career opportunities, or ruining a victim’s credit. If you suspect you or a loved one are being targeted by financial abuse, look through the signs below to determine if it is occurring.
If a person is hypervigilant about knowing precisely how much someone else is spending, that may be a sign of potential financial abuse. They may demand to see receipts to account for spending or thoroughly scan bank account statements to analyze purchases.
An abuser might exert an unreasonable level of control over a victim’s finances, prohibiting a victim from having access to money or credit/debit cards. While disputes over unnecessary spending are not necessarily a sign of abuse, problems arise when someone refuses to let another person purchase basic necessities or pay bills. This is often done to make the victim financially dependent on the abuser.
If you suspect a friend or loved one is experiencing financial abuse of this nature, look for signs that their finances are under strict control by the suspected abuser. The victim may be unwilling to join you in going to events or going shopping, and they may come up with a variety of excuses for being unable to do so. In extreme cases, they may ask you for financial help when it comes to affording basic necessities, as this may be one of the only methods they have of spending money without being monitored.
As an extension of controlling a victim’s access to money, abusers may sabotage a victim’s career. This could include hindering their ability to get to work or making manipulative calls to their employer, among other behaviors. They may outright prohibit their victim from keeping a job, seeking work, attending interviews, or getting a promotion. An abuser may force a victim to work for them, or a family business, without compensation — a violation of minimum wage laws.
The intent of these actions is often to get the victim fired from their job, keeping them financially dependent on the abuser. Even if the abuser depends on their victim’s earnings to pay for day-to-day expenses, they may prefer to go into debt if it means exerting control. This demonstrates the extent to which relationships can become dysfunctional in situations involving financial abuse.
To identify these signs, examine whether the victim in question is able to keep employment. If not, why? If you discover a pattern in which an individual is pestering employers, preventing the victim from getting to work, or otherwise hindering their professional development, you may be witnessing financial abuse.
In addition to strictly controlling the finances of a victim, an abuser may take out loans or open new credit cards in their name, borrow money from their friends or family without intending to pay it back, or force them to file their taxes fraudulently. They may also commit fraud by writing fraudulent checks, using the victim’s accounts and name.
Each of these methods runs up debts that the victim is responsible for without their consent, frequently resulting in accounts being sent to debt collections. In each scenario, the abuser is seeking to exploit the victim for their own financial gain. This can have a disastrous effect on an individual’s credit score, impacting their future opportunities.
To determine if someone is being victimized in this manner, the investigator must pull a credit report, making sure to identify any unusual or unexplained open accounts. If you decide to investigate further, contact the lenders involved and determine when and why the account was opened. If you determine that a friend or family member is the one responsible, this may be a case of financial abuse.
If you or a loved one is experiencing financial abuse, there are steps to follow and resources to access so that you can stop it, report it, and recover from it. Read the following advice to begin addressing this difficult issue.
How can you stop financial abuse? While every situation is unique, there are some general steps to follow that can help you get out of this situation and begin recovering:
If you need access to support, tools, or further information on financial abuse, check out the following resources: