Understanding Financial Abuse

Eighty-four percent of domestic violence victims also experience financial abuse.

While talking openly about money is not always easy, it’s vital to fostering a strong financial wellbeing. Understanding how to spot and take action to protect oneself against financial abuse can be an important skill to have in your toolkit.

What is Financial Abuse?

Financial abuse is a recognized form of domestic abuse and is defined as the taking control of another person’s finances without their permission. Financial abuse can occur in a variety of ways, from spending someone else’s money without their permission, to withholding access to funds or coercing them into debt.  Financial abuse can also be perpetrated by a variety of individuals, including partners, ex-partners, family members or care givers.

Recognizing the signs of Financial Abuse

Financial abuse can be hard to spot as it often starts subtly with one individual in a relationship assuming responsibility for making key financial decisions. The behaviour may then gradually escalate to more abusive and controlling behaviour.

Financial abuse can take many forms and knowing what to look out for is key to protecting yourself from longer term impacts. These forms can include:

• Obsessive monitoring of purchases;

• Imposing unreasonable spending limits;

• Depleting funds from joint accounts;

• Amassing debt in the individual’s name resulting in a damaged credit score;

• Taking control of salary or benefit payments;

• Controlling access to housing and food; or

• Sabotaging a person’s employment resulting in their firing.

How Canadian banks are supporting victims

The Canadian Banks Association (CBA) is working with  member banks to develop solutions to help protect vulnerable customers from financial abuse, including exploring how additional educational and policy tools can be used to combat this behaviour.

As noted by CBA President and CEO Anthony Ostler,  it is important that  victims report any type of financial abuse to their bank as Canadian banks have protocols in place to support and protect customers.

Protect yourself

Financial abuse can be challenging to identify, because in most cases it’s perpetrated by someone with a close connection to the victim and often starts subtly. Still, there are ways to protect oneself:

• Keep records of any funds loaned or given away, and compare this to transactions in your bank account;

• Canada Revenue Agency (CRA) recommends reviewing who can access your CRA account, and removing anyone untrustworthy;

• Seek independent advice from an expert before making major financial decisions, such as agreeing to a loan, changing a will, purchasing property, or moving significant sums of money;

• Exercise caution when opening joint bank accounts;

• Don’t say yes to financial decisions on the spot—consider your choices and seek advice from trusted contacts or experts.

The Canadian Center for Women’s Empowerment has an app for financial abuse victims. The app, STEAR (Support Tool for Economic Abuse Recovery), assists users in finding information on how to recover from financial abuse and rebuild economic security during and after an abusive relationship.

Seeking support

Everyone deserves to have a healthy relationship with money. If you believe you may be experiencing financial abuse, report the matter to police or reach out to a trusted family member,  friend, lawyer, or social worker. Also contact your bank for advice right away.

You can also contact the National Domestic Violence Hotline at 1-800-799-7233.

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