Financial abuse, also known as economic abuse, is one of the most common types of domestic abuse. Financial abusers use money as a weapon to reassert control over, isolate, and restrict economic opportunities for another person.
We typically think of financial abuse as having romantic connotations, such as in a marriage or domestic partnership.
However, financial abuse also happens to occur in other relationships, such as between a parent and a minor child or between a caregiver and an elderly patient.
Here, we will explain the various types of financial abuse and explain how to tell if you are a victim of it.
Signs of financial abuse in romantic relationships
But when one partner controls the finances and controls the other’s use of that money as a means of gaining influence or control over them, it can be a sign of financial abuse.
Financial abuse often occurs gradually and develops over time. It is also difficult to spot from the outside if a person is in an economically abusive relationship.
No one is a typical victim of financial abuse. Anyone can be a victim, regardless of gender, race, income level, education level, or job status.
Negligent use of funds is not uncommon. Here are some red flags of financial abuse to watch out for, not only in your relationships and those of the people you know but also in those of your family members.
1. Denying a partner access to funds, financial information, or basic needs, including:
2. Preventing a partner from earning their own money, including:
3. Forcing a partner to take certain financial actions, including:
Other forms of financial abuse
Financial exploitation can also occur in romantic relationships. A common form of financial abuse is when children are financially exploited by their mothers and fathers, and elder abuse can involve financial exploitation by grown children, grandchildren, and relatives.
Financial abuse of children
Most parents monitor their children’s private information and finances, which is totally normal. However, when parents take advantage of their children and use this information to their own detriment, it falls into financial abuse.
This typically happens when parents are desperate and have run out of financial resources. They use their children’s identities to obtain money.
As an example, a parent may open a credit card in their child’s name, not intending to pay it off, thus hurting their child’s credit rating. Alternatively, a parent could take out a loan in their child’s name and default on the loan.
At times, parents apply for cable or a cell phone in their child’s name and fail to pay any fees. Because the elderly are often unable to defend themselves from financial exploitation, children are a particularly vulnerable population in this regard.
Travelers and sailors should use caution when interacting with children, particularly if they are unaccompanied. Individuals concerned about child abuse and neglect should report the matter to trusted family members or, if necessary, a lawyer.
Financial abuse of the elderly
Financial abuse of the elderly is an even more widespread form of abuse and it can involve many forms. Perpetrators may include relatives, friends, neighbors, attorneys, and home care aides.
Many of these individuals use their energy to help the older individual in their charge or use their money to do so. Frequently, these individuals have the authority to make poor financial choices on behalf of the senior person.
Examples of financial abuse include misuse of credit cards, ATM cards, checks, cash, property, or other valuables, or borrowing money without the intention of ever paying it back.
If you suspect someone is financially abusing a senior in your life, contact a family law attorney to determine what you can do.
What are the consequences of financial abuse?
Financial abuse is damaging not just to the victim in the present but also in the long term. It does not just damage the victim financially but also emotionally and psychologically. Financial abuse is often an early warning sign of domestic abuse.
In addition to short-term issues that affect the family’s finances, long-term consequences include the possibility of domestic violence and financial ruin.
It is essential for victims of financial abuse to recognize the problem and seek assistance as soon as it is safe to do so.
Victims of financial exploitation often experience long-term economic repercussions. They often have low credit scores or no credit history due to a lack of access to financial accounts in their own name.
Other individuals have credit scores destroyed by abusers who run up charges in their names and fail to pay them back. In addition, with little or no work history, victims of financial abuse may have difficulties finding a job.
This may limit their money-making opportunities long after their abusers have gone.
Financial abuse can result in criminal penalties for fraudulent tax returns and penalties for making false statements to obtain a loan. Victims are often held legally responsible for debts that they did not incur, such as financing for a home or car associated with a Ponzi scheme.
What can victims of financial abuse do to get help?
If you cannot afford to be in a financially abusive relationship, you should not stay in it. The first step is to clearly recognize that you are in trouble and to decide that you should leave the relationship.
Next, here are the steps you need to take to free yourself from a financial abuser.
1. Gather your financial information
Gather all of the information you can get your hands on. This includes copies of credit card statements, bank statements, joint accounts, and tax returns.
Obtain a copy of your credit report from one of the three major credit bureaus. Additionally, it would be helpful to have a copy of your birth certificate, Social Security card, medical records, and any other important documents on hand.
Keep these records in a safe location. If you encounter issues, leave them with someone you trust who lives outside of the household you share with your abuser.
2. Begin to educate yourself about your finances
You may have difficulty understanding how your finances work without regular access to your personal finances and household financial decisions. Start by learning the basics of finance, including understanding how your credit score impacts your financial life.
You might be unaware of how best to handle your money, but there is plenty of information available on the subject. It may initially seem difficult to grasp, but you can learn everything you need to know. With free resources like these available at Clever Girl Finance, learning about personal finance is quite easy.
3. Start to save your own money
Saving a little bit of cash is an important step to leaving an abusive partner. Also, if relevant, you must prepare for divorce.
While it isn’t easy to make money when you don’t have it, it is doable. Consider alternative options as to how to save money. Do not hide any financial details from your work or ask around for a loan from a close friend.
If possible, apply for a credit card in your name so you can have access to a line of credit if necessary.
4. Seek help
The most important thing is to get help. Work with a team that includes a counselor, support group, therapist, or domestic violence advocate. Contact your friends and family and tell them about your circumstances. The National Coalition Against Domestic Violence provides resources to assist victims of financial abuse.
Finally, your safety is the most important of all. If you are in danger, there are legal protection steps you can take before leaving your abuser to stay safe. If you feel unsafe, contact an attorney or legal aid organization to discuss your situation.
Filing for an order of protection or restraining order, which can prevent your abuser from harassing, threatening, or even contacting you, is an option.