Understanding Financial Abuse: Signs, Types, and Legal Implications
Published: 17 October 2023
Financial abuse, often overlooked in the broader discussion of abuse, is a deeply distressing and pervasive problem that affects countless individuals. It can occur in various forms and settings, including domestic relationships, and it can leave long-lasting scars on the victims. In this article, we will explore what financial abuse is, its prevalence, types, and legal implications.
What is Financial Abuse?
Financial abuse, sometimes referred to as economic abuse, is a form of domestic abuse that involves controlling or exploiting someone’s financial resources to gain power and control over them. This type of abuse can manifest in several ways, ultimately leaving the victim financially dependent and vulnerable.
Financial abuse is defined as any behaviour that has a substantial adverse effect on one’s ability to:
- Acquire, use, or maintain money or other property (such as a mobile phone or car);
- Obtain goods (such as food and clothing) or services (such as utilities, like heating).
Signs of Financial Abuse
Identifying financial abuse can be challenging, as it often occurs alongside other forms of abuse, such as emotional or physical abuse. Through marriage or living abroad, you may have become the victim of financial abuse. Here are some examples that indicate financial abuse may be occurring:
- Controlling access to money: An abusive partner may tightly control all financial matters, including your access to income, savings and spending, leaving the other with limited access or knowledge about your own financial situation. This can include taking out money or credit in your name without your knowledge or permission, monitoring bank accounts, denying access to credit cards, or forcing you to hand over your income. They might also acquire, use, or maintain money or other property (such as a mobile phone or car) or obtain goods (such as food and clothing) or services (such as utilities, like heating),and control your access to essential things such as food, clothing.
- Coercive financial actions: Financial abusers may use coercive tactics to manipulate your financial decisions. They might force you to take on debt, sign financial agreements, or even commit fraud in your name. They might cause you to lose out on benefits by controlling what you apply to. They might also control someone taking out money or credit in your name without your knowledge or permission.
- Isolation and dependency: Financial abuse often goes hand-in-hand with social isolation. Abusers may prevent you from working, going to school, using transport, or participating in activities outside the home, making you entirely dependent on the abuser for financial support.
Is Financial Abuse a Crime in the UK?
In the Domestic Abuse Act of 2021, economic abuse is now included in the legal definition of domestic abuse and is a significant step towards providing protection and support for victims. However, it may not always result in criminal charges.
In the Domestic Abuse Report 2022, 30.5% of respondents had experienced financial abuse.
Legal Implications and Recent Cases of Financial Abuse
Recent legal cases, such as S (A Child) (1980 Hague Convention Stranding) [2022], demonstrate that courts are increasingly considering abuse and controlling behaviour in child proceedings. Mr Justice Peel considered and applied PD 3AA and 12J (domestic abuse/coercive control) to a Hague Convention Abduction case. He made a suspended return order to allow the mother to obtain a visa to travel to Portugal, where the welfare issues would be resolved. Mr Justice Peel also gave directions to allow a welfare decision if the mother had to return to Pakistan instead.
Another case, DP v EP [2023] EWFC 6, highlighted how economic abuse can impact financial settlements during divorce. In this case, the court recognised that economic abuse, as defined in the Domestic Abuse Act of 2021, had a negative impact on the husband’s financial position.
The husband was functionally illiterate and over the course of the marriage, the wife bought, sold and attempted to sell substantial assets, while deliberately concealing her actions from the husband because she knew he would not consent. This case demonstrates that economic abuse can amount to “conduct” within the meaning section of 25(2)(g) of the Matrimonial Causes Act 1973, a factor to be considered when the court is deciding upon a financial settlement.
VV v VV [2022] EWFC 46 exemplifies the court’s stance on non-disclosure in financial matters. The court viewed both the wife’s secretive communications and the husband’s failure to disclose as misconduct. The wife’s behaviour in communicating with the founder of the company in which the husband had a financial interest behind the husband’s back was gross and obvious conduct which the court was entitled to consider. However, the husband’s conduct was also a consideration and his failure to disclose matters to wife or the court was viewed as litigation misconduct. This case illustrates the disdain with which the court regards non-disclosure, even if it is a reaction to legitimate concerns about the behaviour of the other party.
Seeking Help and Regaining Financial Independence
If you are a British citizen living abroad, you may find it particularly hard to escape abuse as you are in an unfamiliar country. If you find yourself in such a situation, it’s essential to understand your legal rights and seek help.
At Expatriate Law, we recognise different types of abuse and are qualified to help you understand your legal position and regain your financial independence. If you believe you have experienced financial abuse, when going through the divorce process, we will scrutinise any financial disclosure particularly carefully because you will be limited in the knowledge you have about the financial position of your partner.
In conclusion, financial abuse is a grave issue that affects many lives. It may not always result in criminal charges, but it has significant legal and emotional implications. Identifying the signs, seeking help, and understanding your rights are crucial steps towards breaking free from this cycle of abuse.
If you or someone you know is a victim of financial abuse, don’t hesitate to reach out for assistance and support. You have the right to live a life free from financial manipulation and control.
