It’s the domestic abuser’s hidden weapon. But if you wield it, your time’s up

Intimate-partner violence is fundamentally about control – it occurs when one party in a relationship seeks to dominate and exert power over the other. While national conversations about the physical aspects of domestic violence have slowly become more open and understood, the hidden forms of abuse continue to fester in the shadows.

Financial or economic abuse is a form of intimate-partner violence that not only damages a person’s financial stability but undermines their ability to achieve economic independence. Some have even referred to it as “sexually transmitted debt”.

Financial abuse by a partner or ex-partner can have prolonged impact.Credit: Steven Siewert

In the report being tabled on Thursday by my corporations and financial services joint committee, we document numerous reports of how one partner – often a man – uses the financial industry and its products as tools to exert control over the other partner, typically women. The methods employed range from preventing access to joint finances and restricting the ability to work, to deliberately damaging a partner’s credit rating and accumulating massive debts in their name, often through schemes such as “buy now, pay later”.

Now, perpetrators and facilitators are on notice. With unanimous support from the parliamentary committee, our 61 recommendations establish a robust framework to combat this hidden weapon of domestic violence and ensure the safety of Australians accessing financial services.

Much like physical abuse, the scars and psychological toll of financial abuse can last for years – and in many cases, may never fully heal. The weight of debt, a poor credit rating and significant financial losses can affect every decision a victim makes for years to come.

Shenane Hogg, a First Nations woman who provided evidence to the inquiry, was placed in a coma and suffered both brain injuries and bodily wounds after a brutal beating from her former partner. While it took her 18 months to learn how to walk again, the $56,000 of debt accrued in her name was far more difficult to overcome, with $16,000 of that amount coming from penalties and interest accrued while she was unconscious in the coma. Shenane’s lender provided no relief even after evidence was provided.

In some cases, the impact of financial abuse can persist long after the abuse itself ends. Julie Adams shared with the committee the heartbreaking story of her daughter, Molly, who she says died by suicide following years of emotional, sexual, physical and financial abuse. After her death, Molly’s superannuation was paid to her alleged abuser, and despite Julie’s efforts to stop him from profiting from the years of torment, she was ultimately powerless to prevent it.

The possibilities for financial abuse are as vast as the financial system itself. Banks, financial institutions and professionals such as accountants, lawyers and advisers often fail to recognise how their roles can inadvertently facilitate this abuse. For example, accountants in pursuit of personal profit over professional standards may create trusts that obscure access to money that was meant to be shared. Some lawyers, making profit over principled decisions, create insurmountable financial and legal barriers that prevent a fair settlement in divorce proceedings.

It is time for the legal profession and its representative bodies to act to re-establish proper professional standards to halt the weaponisation of the law against women and children fleeing abuse. Financial advisers and accountants may, for personal gain, help manipulate taxable income or child support payments to be as low as possible, financially crippling both the children and the former partner. The actions of too many professionals in white collars, who facilitate abuse, brings the entire financial sector into disrepute. It’s past time for that to stop.

Just as access to guns and knives is regulated due to their potential to cause harm, financial services should be designed with their potential misuse as a weapon in mind. The recommendations from the Corporations and Financial Services Committee urge governments and banking institutions to take proactive steps to identify and prevent financial products and services from being used as tools of abuse. This will not be an easy task, but it is an essential one.

Addressing this systematic issue requires a co-ordinated response from both the financial industry and government to ensure all forms of domestic violence are eradicated, and victims can regain their financial independence. While it is one thing for a parliamentary committee to identify issues and suggest solutions, it is quite another for those with power to act in ways that serve the national interest, re-establish basic standards of safety for users of financial products and services.

To the perpetrators of financial abuse, I say: it’s over. The community will no longer turn away. It’s time to leave the scourge of financial abuse behind us.

Deborah O’Neill is chair of the parliamentary joint committee on corporations and financial services.

Crisis support is available from Lifeline on 13 11 14 or the National Sexual Assault, Domestic and Family Violence Counselling Service (1800RESPECT) on 1800 737 732.

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