Abuse is often associated with behavior that displays outward signs – bruises from physical violence or insults and threats from verbal assaults, for example. However, mistreatment and exploitation can target more than your mind and your body. If someone is wreaking havoc on your money, your checking account or your credit score, you may be feeling the devastating impacts of financial abuse.
What is financial abuse?
While many cases of financial fraud and online identity theft involve a criminal you’ve never met, the perpetrator of financial abuse typically involves someone close to you: a family member, a domestic partner or a caretaker.
“The hallmark of financial abuse is control and isolation,” says Cliff A. Robb, PhD, faculty director of consumer finance and financial planning at University of Wisconsin-Madison’s School of Human Ecology. “By removing social support, these victims have nowhere to turn.
“If your voice is being minimized or someone is establishing a pattern that isolates you and your ability to acquire and manage your money, you may be a victim.”
Financial abuse targeting the older population
Financial abuse comes in many forms and targets different sets of victims. Robb says that financial abuse of the elderly – particularly elderly women – is an especially troubling trend.
“We are seeing a significant aging in the U.S. population,” Robb says. “By 2030, at least 20 percent of the population will be 65 or older, and we’ll also see a greater proportion of Americans who are 85 or older. With concerns of mental decline, gender disparity and health issues, there is a confluence of really troubling factors that put these people at high-risk of being financially abused.”
Robb says that the perpetrators of financial abuse against the elderly are most likely to be close family members. The most common form of abuse is one of these family members assuming the power of financial attorney.
“It’s easy for a family member to get state support for a transfer of power when there are clear medical issues such as dementia, Alzheimer’s or other forms of cognitive decline,” Robb says. “They can argue for incompetence on account of a loved one. A family member can present themselves as a protector in a legal setting and then have full access to abuse savings and bank accounts.”
If you suspect financial abuse of an elderly person, report your concerns to the state authorities. The National Council on Elder Abuse has a state-by-state directory of who to contact to help protect the victims.
Financial abuse targeting a spouse or partner
Outside of age-based financial abuse, there are many examples of this kind of abuse between domestic partners. For example, Robb says a partner might throw away bills in your name.
“If you’re late paying it, it’s going to give them even more control over you,” he says. “They establish a pattern of dependence and minimize your ability to grow financially.”
According to data from the National Domestic Violence Hotline, 22 percent of callers in 2017 indicated they were being financially abused.
To help victims recognize the signals of financial abuse, the organization shares these common examples of financial abuse:
- Providing an allowance and closely monitoring how you spend it, including demanding receipts for purchases
- Depositing your paycheck into an account you can’t access
- Preventing you from viewing or accessing bank accounts
- Preventing you from working, limiting the hours that you can work, getting you fired or forcing you to work certain types of jobs
- Maxing out your credit cards without permission, not paying credit card bills or otherwise harming your credit score
- Stealing money from you, your family or your friends
- Withdrawing money from children’s savings accounts without your permission
- Living in your home but refusing to work or contribute to the household
- Forcing you to provide them with your tax returns or confiscating joint tax returns
- Refusing to provide money for necessary or shared expenses like food, clothing, transportation, medical care or medicine
Despite the widespread problem of financial abuse of a partner, Robb says that this issue is “very under-studied.”
“There is a need for broader education,” Robb says. “These victims might be financially insecure, and the perpetrator ties that directly to the relationship to exacerbate those insecurities. There are often other forms of abuse happening, too, so the financial abuse becomes an extension of mental or physical abuse.”
What to do if you’ve been financially abused
If someone has been exploiting your finances, here are four key steps you should consider.
- Talk to someone. Robb recommends that victims of domestic financial abuse look for social support and community-based programs. In addition to searching for local options, you can call the National Domestic Violence Hotline at 1-800-799-7233. FreeFrom, a non-profit that aims to help victims of abuse and exploitation, also offers access to private peer-to-peer support groups and help finding new sources of income and compensation for lost wages.
- Pull your credit report. Your abuser may have opened credit cards in your name or done other damage to your financial well-being. Go to annualcreditreport.com to access your credit report for free from all three credit reporting agencies to determine if any significant damage has occurred.
- Contact a credit counselor. If the perpetrator has racked up loads of debt in your name or you are unsure of how to repair your credit, the National Foundation for Credit Counseling can help connect you with resources to help navigate your next steps.
- Empower yourself with knowledge. The Allstate Foundation offers a Moving Ahead curriculum, which includes five educational modules to help on the pathway toward recovery from financial abuse.
Original source: Bankrate