Love and Money: 6 Signs of Financial Abuse You Shouldn’t Ignore
When you think of domestic violence, your first thought might be of someone who is being physically abused. However, there are other serious forms of violence that take place at home. One form of abuse that is not discussed as often is financial abuse.
During financial abuse, the abuser engages in destructive behavior that results in the victim experiencing a financial crisis and forming a financial dependency on the abuser. The victim’s funds or assets are used solely for the abuser’s benefit. Psychologist Gretchen Kubacky said financial abusers often blame their victim and exhibit extreme behavior. “Financial abuse takes many forms, including blaming the significant other for financial strain, putting the significant other on an absurdly strict budget, public shaming about expenditures, utilizing all or most of the income on an addiction, and taking earned or gifted money away from the significant other,” Kubacky told The Cheat Sheet.
Just 3% of Americans said they felt financial abuse is likely have a long-term negative impact. Emotional (43%) and physical abuse (22%), ranked much higher on the list, according to an Allstate survey. However, financial abuse is more common than many people realize. The Allstate survey revealed financial abuse happens in 99% of all domestic violence cases. Roughly three in five Americans say they know someone who has been financially abused by their partner. Financial abuse can happen to just about anyone. It can occur among husbands and wives, children and their parents, and a variety of other domestic combinations.
Jennifer White-Reid, vice president of domestic violence services at Urban Resource Institute, one of the largest providers of domestic violence services in New York City, told The Cheat Sheet financial abuse doesn’t discriminate. “Anyone who is a victim of domestic violence will likely experience financial abuse as well. It is important to recognize that domestic and financial abuse can affect anyone, regardless of age, race, gender, or socioeconomic status,” said White-Reid.
Why financial abuse?
You may wonder why someone would abuse their loved one financially. Certified Public Accountant Tiffany Couch told The Cheat Sheet the answer is simple: because they can. “No one is immune. However, this is more likely to happen when the abuser has total control over the person, their appointments, and their communications. It is also most likely to occur when there is no oversight over the financial documents,” said Couch, principal at forensics accounting firm Acuity Forensics.
Some abusers use money as a tool to control their partners. It is a common way to convince victims to remain in or return to an abusive relationship. Once a victim has become financially dependent on his or her partner, it can become difficult to break free.
Sadly, the researchers said abusers intentionally withhold financial resources and go to great lengths to inflict financial harm in an attempt to keep their victims bound to the relationship. “It is common for abusers to destroy victims’ credit, deny them access to money, and force them to quit their jobs or to decline promotions. Without resources of their own, victims are often unable to care for themselves, find employment and housing, or save for the future. Those who manage to leave their abusers can find themselves debt-ridden, lacking necessary job skills, and even at risk for homelessness,” said the report’s researchers.
Financial abuse may start subtly and then become a bigger problem over time. The Cheat Sheet spoke with a financial, legal, and mental health experts to learn more about what to watch for.
Signs of financial abuse
Are you or a loved one being financially abused? Here are some of the signs.
A financial abuser will try to isolate his or her victim so that the abuse goes unnoticed by friends and family members. This helps prolong the abuse and strengthen the abuser’s power. Private investigator John Nardizzi, founder of Nardizzi & Associates, said vulnerable, trusting people are highly susceptible to falling prey to this behavior. “Isolation is a key sign: a con man (or woman) slides into the orbit of someone’s life and suddenly is in charge of that person’s finances. Elderly people who live alone and do not have family around are vulnerable, but also men and women who are overly trusting, maybe lacking assertiveness, and in a new relationship,” Nardizzi told The Cheat Sheet.
2. Unusual bank activity
Have you noticed bank activity that hadn’t been occurring before? If so, this is a red flag. Couch said this is one of the first signs of trouble. “Pay attention to unusual activity in bank or investment accounts that were not happening before, or transfers of funds out of your accounts to unknown accounts,” warns Couch.
3. Workplace harassment
Some abusers will attempt to harass their significant other at work. They make unwanted office visits in a ploy to get their partner fired. Once the job loss occurs, the abuser may try to stop the victim from getting another job. Consequently, the victim has no other choice but to depend on the abuser for financial survival.
4. Monitoring income
Financial abusers will keep close tabs on how much their partner makes. The abuser may reason or explain to their victim that they are just watching out for his or her well-being, when in fact, the abuser is making plans to take control of the money. Certified Financial Planner Michael Maynes said abusers sometimes try to present themselves as caretakers so that their intentions are hidden. “Signs of financial abuse include the abuser portraying himself as a “caretaker,” and building trust before taking over control of bill paying accounts, while simultaneously building barriers between victims and family members,” Maynes told The Cheat Sheet.
5. Forcing financial decisions
If your loved one is pressuring you to make a financial decision you’re not comfortable with, this may be another sign of trouble. Robert Baltzell, founder of RLB Financial said this is just one of several types of financially abusive behavior. “There are many different types of financial abuse. Taking property and forging a signature are two very common forms. Also, pressuring someone to sign a deed, will, power of attorney, or other legal document. Other forms include using scare tactics or exaggerated claims to get the victim to send or turn over money, like a phone or charity scam,” Baltzell told The Cheat Sheet.
6. Theft and misuse of property
A financial abuser will go to great lengths to assume control over a victim. Certified Financial Planner Chris Cooper told The Cheat Sheet that financial abuse can be as brazen as outright theft. “Some financial abusers will use the car, house, or other property without compensating the victim for their use or in a manner harmful to the victim (such as holding the victim hostage). He or she may engage in other thefts, or conversion of property, such as retitling bank accounts, brokerage accounts, houses, and cars in another name,” said Cooper.
Why victims stay
Victims have been stripped of their financial power, and are fearful of venturing into the unknown. Many are not sure how they will survive without the support of their abuser. The threat of homelessness and poverty become so overwhelming that the victim chooses instead to stay in a toxic situation. “Often the victim of abuse won’t get help because they are tied emotionally to the con artist. Some struggle to report abuse out of embarrassment. But as time passes, it is important that they realize there is no shame in trusting someone; the shame lies with the abuser,” said Nardizzi.
How to get help
If you are being financially abused, speak up. Don’t hide what is happening to you. The sooner you say something, the sooner you can get help. Couch said it’s imperative to move past any feelings of embarrassment. “Call someone. Call a loved one, a friend, your CPA, a lawyer or even your banker or doctor. You might feel embarrassed or foolish for letting this happen to you. You may not want to share your problem. These are normal feelings, but here are people who can help,” said Couch.
When it comes to getting out of your situation and finally getting help, White-Reid recommends developing a safety plan. Here’s what it entails:
Gather important documents. Make sure all of your important financial documents are safe and easily accessible. White-Reid said the safest location is somewhere other than your current residence. “People being financially abused should take their finances into account when creating their general safety planning. They should keep copies of any important financial or personal documents—bank statements, birth and marriage certificates, ownership documents for shared assets — in a safe place outside of your home — with friends, family, or a secret location,” White-Reid told The Cheat Sheet.
Set aside money. If you have any source of income, put some of that money in place that cannot be reached by your abuser. This will help you get back on your feet faster. “Work to set aside funds, even a small amount, with a trusted friend or family member or in a secret location in order to have a little bit of financial security when they flee their partner,” White-Reid said.
Order your credit report. There is a possibility that your abuser may have fraudulently used your credit card or taken out loans in your name. The only way you can find out for sure is to order a copy of your credit report. Take inventory of your finances so that you can fight back. “People facing financial abuse should also order a copy of their credit report before leaving their partner, as these reports are traceable. Equifax, Experian, and TransUnion offer credit reports free once a year, and then survivors can report fraudulent or disputed charges,” said White-Reid.
Create a budget. Plan for life after your relationship. You will need to prepare your finances for life on your own. White-Reid said it’s important for survivors to research the cost of housing, food, and other expenses so they know what to expect when it’s time to live on their own.
Engage in risk management. Do everything you can to shield whatever financial assets you have. White-Reid suggests changing PIN codes and passwords for personal accounts. Also make sure to clear your internet search history so your partner cannot track any research you have conducted about obtaining financial independence.