4 Warning Signs Of Financial Abuse—And How Victims Can Recover (2023)

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October is Domestic Violence Awareness Month. If you or someone you know is in danger, call a local hotline, or the U.S. National Domestic Violence Hotline at 1-800-799-7233 and TTY 1-800-787-3224, or 911 if it is safe to do so.

Domestic abuse is more than physical harm—in many cases, it hurts victims by stripping away their control over their own finances and destroying their financial health.

Domestic financial abuse is rarely discussed, but it goes hand in hand with domestic violence.

A 2011 Center for Financial Security study of 103 women who had suffered domestic violence found that 99% of them also reported experiencing economic abuse, defined as a partner taking control over a significant other’s ability to acquire, use and maintain economic resources.

During the Covid-19 pandemic, officially reported domestic violence cases in the U.S. jumped 8%. The perfect storm of a recession, widespread job loss and families being forced to stay at home increased the risk factors for domestic violence.

Domestic abuse victims were forced to spend more time with abusive partners, had fewer chances to discreetly seek help or resources, and were cut off from friends, neighbors and colleagues who might otherwise have reported signs of abuse and violence.

What is Financial Abuse?

Financial abuse is a tactic used by abusers to increase control over their victim through maneuvers like reducing the victim’s access to bank accounts and assets or forcing them to quit their job.

Financial abuse often prevents victims from leaving their abuser because they don’t have the financial means to do so. It can happen to anyone, at any time, regardless of whether they’ve been married to their partner for years or are in a new relationship.

Kim Scouller, a financial services professional at WealthWave, leads its women empowerment and domestic violence awareness programs. She emphasizes how hard it can often be for victims to identify and decipher financial abuse red flags.

(Note: Most research on domestic violence is within traditional cisgender male and female relationships. However, domestic abuse within same-sex relationships occurs at a similar rate to heterosexual relationships).

“When we look at a list of red flags, they seem really obvious to us. But for a lot of women, it’s very incremental how an abuser goes from someone you feel is taking care of you and is doing all of these things because they love you, to someone who’s taken complete control over your finances and your life,” Scouller says.

Financial abuse can creep into a romantic relationship in subtle, sinister ways. In one Reddit thread, users shared their experiences of partners restricting access to their own money, spending all of their money or racking up debt in their name.

Often, it took victims a long time to recognize that they were financially abused and they had a hard time convincing others that anything was wrong.

“He first began stealing my debit card out of my wallet when I was sleeping or showering and would go take care of his needs with my money while he was unemployed,” wrote one user. “When he did find a job, he was even more abusive at this point and kept my debit card from me, and didn’t allow me to have any access to my money at all, despite having his own bank account.”

4 Types of Financial Abuse

Here are four common forms of financial abuse—and resources to help protect or recover from it.

1. The Abuser “Takes Care” of the Finances

Some couples choose to have a relationship “CFO” to manage their finances, especially if one partner has a predilection for balancing the books or tracking spending. That’s normal. What isn’t normal is when a partner takes control of the finances and doesn’t give the other partner access to accounts and funds.

This strips away the victim’s economic self-sufficiency from the victim, such as having money to meet basic needs. It can be done through the guise of “taking care” of the finances but leaves the victim in the dark about how the money is being managed.

According to the National Network to End Domestic Violence (NNEDV), after an abuser takes control of the finances, they may give the victim an “allowance” but reduce it over time. This can eventually prevent the victim from obtaining necessary items such as food and medicine.

2. Employment Sabotage

In an effort to prevent the victim from having access to money, the abuser may forbid the victim to work—or sabotage their current employment.

That can include harassing the victim at their workplace or physically abusing them before important meetings so they show up unprepared and distracted—if they’re able to make it to work at all.

A 2003 report from the Centers for Disease Control and Prevention (CDC) estimates that women in the U.S. lose nearly 8 million days of paid work each year because of violence they suffer from current or former partners.

Through employment sabotage, the victim is often pushed to the point where they feel like they have no choice but to quit their job. Being unemployed leaves a victim in a vulnerable financial position where they become completely dependent upon their abuser.

An abuser can also prevent a victim from looking for jobs or attending interviews.

3. Economic Exploitation

Economic exploitation is one of the most severe aspects of financial abuse. In this case, an abuser will intentionally destroy the victim’s financial resources or credit history. They’ll open a line of credit under the victim’s name without their consent, refuse to pay bills in the victim’s name or gamble away jointly earned money.

Oftentimes, the victim has no access to their financial accounts so they have no idea this activity is happening. This behavior can tank the victim’s credit, which means they’ll have a hard time getting approved for financial products, like a credit card, auto loan or mortgage, in the future.

“For years, [the victim] can be haunted with bankruptcies, tax liens and bad debt that follows them around,” Scouller says.

It’s possible to dispute identity theft by an abusive partner with the Federal Trade Commission (FTC) and the major credit bureaus. Joint accounts, however, are more difficult to untangle—and depending on your state, you may be liable to debt incurred on the account, even if it wasn’t you swiping the credit card. Some businesses require a police report to remove fraudulent debt from a victim’s accounts and it’s not always safe for a victim to file one. Often, the victim must wait until they’re able to successfully escape their abuser in order to take the many steps toward economic recovery.

4. Coerced Debt

Another form of economic exploitation is coerced debt, which refers to an abuser forcing a victim to take out a line of credit or make transactions in the victim’s name. Sometimes, the abuser will threaten to harm the victim or their children if they don’t comply.

Coerced debt is one of the most complicated types of financial abuse to reconcile and recover from, since it’s hard to prove that the victim didn’t consent to making the transactions—especially if they were made online.

“In most states across the U.S., there is no legal way to get yourself out of this debt,” says Teal Inzunza, program director for economic empowerment at the Urban Resource Institute, a New York City social services organization dedicated to empowering victims of domestic violence.

There’s been an uptick in coerced debt since the Covid-19 pandemic began, according to Inzunza. She says that the financial difficulties many families continue to face in the aftermath of the pandemic is making abusers “desperate” and they turn to debt coercion as a way to stay financially afloat.

The National Consumer Law Center (NCLC) advises coerced-debt victims to file an identity theft report with the Federal Trade Commission, and, if it’s safe to do so, with local law enforcement. Documents that could help victims with their case include letters from a sexual assault counselor, domestic violence shelter, victim advocate or health care provider.

How to Escape Your Abusive Situation

Realizing you’re in an abusive situation is a traumatizing and difficult reality to recognize. Creating an escape plan could be your next step—but it requires planning and consideration for your safety as well as that of your children, if you have any.

Here are steps to take to escape an abusive relationship:

Create a Safety Plan

Leaving an abusive relationship is the most dangerous time for the victim. Erin Scott, executive director at the Family Violence Law Center, stresses the importance of creating a safety plan before physically leaving an abusive situation.

“There are a million variations of this, and each survivor is different, but the first option we explore is finding a safe person to go to, like a relative or a friend,” Scott says.

Scott acknowledges that not everyone will have access to shelter with people they know, either because they lack a support system or the abusive partner could know where these people live, which could create a dangerous situation. In that case, turning to an emergency shelter or domestic violence shelter would be the next best option.

You can search for a domestic violence shelter near you using this online database.

Scouller says creating a “personal financial safety plan” is also crucial for a victim to leave their abusive situation. For her, that means stashing away cash to help make an escape happen.

Scouller says stashing cash can mean hiding it or opening a secret bank account to hold the funds. These are, however, extremely risky actions to take—if an abuser were to find that money, they could get angry and punish their partner.

If you aren’t able to stash cash, a shelter will provide basic living necessities to you for free, and oftentimes will later assist you through the process of filing for government benefits until you secure a job and are able to get back on your feet financially.

Gather Essential Documents

If you’re in a position where you have access to essential documents, such as your Social Security card, health insurance card, or passport, Scott recommends bringing them with you when you escape. If you have children, you should bring their identification as well.

These documents will often be necessary to file for government benefits or start a new job.

Find Safe Shelter

There are a variety of resources available to survivors, such as domestic violence shelters. These resources are free and will provide basic necessities to you at no cost, such as toiletries, food and clothing, and will often grant immediate short-term housing to keep a survivor and their children safe.

If you’re worried about finding a legitimate shelter on your own, you can call the U.S. National Domestic Violence Hotline at 1-800-799-7233 for recommendations of where to go.

How to Recover from Financial Abuse

Knowing the warning signs can help you recognize if you’re a victim of financial abuse. From there, you can put a plan in place to help escape an abusive situation. Even if you’ve lost control of your finances, there are resources to help you,

Get Financially Educated

Becoming financially literate is one of the most empowering things anyone can do. Learning how to manage your own finances can give you the knowledge you need to rebuild your life after escaping an abuser.

There are numerous nonprofits that empower domestic abuse survivors through financial literacy. The Allstate Foundation Moving Ahead Curriculum, for example, educates survivors on crucial financial topics such as budgeting, managing debt and improving credit. The curriculum, which is free and self-guided, focuses on helping survivors move from short-term safety to long-term security.

Freeform.org is another resource that aims to create an ecosystem for survivors to build wealth and financial security. It offers free online webinars, such as “Protecting Your Money as a Survivor,” to help achieve that mission.

“Once you know the basic financial principles, and the pieces of a solid financial plan, you can start putting the things together that you need to start over,” Scouller says.

Review and Freeze Your Credit Reports

Pulling your credit reports won’t tell you your credit scores, but it will detail the various accounts open under your name, their balances and whether payments have been made on time. You’ll need this information when you file an identity theft case with the FTC.

All three main consumer credit bureaus (Equifax, Experian and TransUnion) are offering free weekly access to credit reports through December 2023. You can request them via AnnualCreditReport.com.

To prevent more accounts from being opened under your name, you can freeze your credit reports for free with each of the three credit bureaus. Doing so will block lenders from pulling your credit reports to approve or deny new loans.

Read More: How To Freeze Your Credit Report

Take Your Financial Recovery One Day at a Time

Escaping an abusive relationship is a stressful, scary and emotional time. After leaving and assessing any financial damage you may have incurred due to financial abuse, you could be feeling overwhelmed—or even defeated—in rebuilding your personal finances.

It’s important to remember, though, that you won’t be able to fix everything overnight. Tasks such as filing for identity fraud, rebuilding a credit score or accumulating savings take time.

In the meantime, be kind to yourself. Know that there are resources and people out there waiting to support you, even after your initial escape.

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