What is economic abuse?

Lund Bennett Family Law - Cheshire and Manchester

Financial abuse affects people in all areas of life, regardless of their wealth or background. It’s not about the money itself but rather using it as a way to dominate someone and keep them under control. This insidious form of manipulation can happen anywhere – no one is immune from its devastating effects.

Abusers have a long history of manipulating their victims financially, but it was only recently that this insidious form of abuse got the attention and protection it deserved. Thankfully, through the Domestic Abuse Act 2021, financial security is now provided to those affected as they reclaim control over their lives.

The Domestic Abuse Act has been updated to include economic abuse within its definition, in order for victims of this form of maltreatment to be provided with the support they require. Professionals too now have access to new tools designed specifically for assisting those affected by such violence.

The legal, financial, and other sectors, however, still have a way to go. Moving forward, it is crucial for all professions to be aware of the indicators of economic abuse and to be able to direct survivors to the right resources.

What is economic abuse?

Economic abuse is a form of control used to create financial insecurity in victims, stripping them of their independence and forcing them into economic reliance on the abuser. This insidious method makes it harder for victims to extricate themselves from dangerous situations.

It is a legally recognised form of domestic abuse and is defined as:

“Any behaviour that has a substantial adverse effect on another person’s ability to—

(a) acquire, use or maintain money or other property, or

(b) obtain goods or services.”

Economic abuse is the use of finances and resources to exert control over a victim, now and in the future.

It is estimated that one in six women, and one in seven men, have suffered some form of financial abuse by a current or former partner.*

This abuse is often subtle and difficult to identify, meaning it can go unnoticed for some time. It frequently occurs in conjunction with other types of abuse, such as physical, sexual, and emotional abuse. In fact, it is estimated that 95% of reported domestic abuse involves economic abuse*.

Coercive and controlling behaviour often leads to feelings of helplessness, as it disconnects people from their supportive network and limits the freedom they may have. By taking away resources or capacities that foster autonomy, these oppressive tactics can trap individuals in a cycle with little escape.

The signs of economic abuse? 

Economic abuse is a form of manipulation that can be difficult to recognize, but it involves abusers restricting the access their victims have to financial resources and exercising control over their spending. It’s an often unseen tactic used by perpetrators in coercive relationships – with devastating consequences.

Financial abuse is a growing issue within the scope of domestic violence. Many perpetrators have complete control over their family’s finances, trapping victims-survivors in an endless cycle of economic insecurity; from denying them access to resources such as money and credit facilities, to even going so far as restricting basic needs—like food clothing and warmth at home.

They can hinder the survivors’ ability to earn money and income by deliberately keeping them out of education or work, or by reducing their work hours. For those that work, a perpetrator may take their pay off them.

Abusers often utilise a victim’s financial situation to their advantage, ranging from stealing money or possessions, refusing to pay shared bills, and even deceptively running up debt with loans or credit cards. In the worst cases they’ve been known drain joint accounts and pile on overdrafts without the individual being aware.

This has a significant impact on the survivors’ lives, trapping, frightening, and isolating them, with long-term effects on their mental and financial well being.

Examples of economic abuse include:

  • Sabotaging your income
  • Excluding you from financial decisions
  • Controlling or denying your access to money
  • Blocking financial resources, benefits, and information
  • Dictating, tracking, or making you justify all expenditure
  • Refusing to contribute to household expenses
  • Deliberately making you ask for money
  • Preventing access to necessities, like food, clothing, or medications
  • Removing any money you have or make
  • Insisting accounts and property are in their name only
  • Coercing you into debt or building debt in your name without your knowledge.

Leaving an abusive relationship 

Post separation abuse can be a very real and persistent form of control experienced by survivors long after the relationship in which they were abused has ended. It is an issue that should not go overlooked or ignored as it can have profound consequences on individuals’ lives.

An important concept for family lawyers to understand is how divorce cases are handled and if there’s any need of extra guarding. Knowing this knowledge can have a major impact on the outcome!

In cases of economic abuse, when separated couples deal with their finances, the perpetrator can use this opportunity to continue the abuse by sabotaging the legal process and limiting access to marital assets as a means of control.

Divorce can be a difficult process, and the other party may try to make it even harder by hiding assets or causing unnecessary delays. Such tactics are designed to gain power in the situation, but they also create fear and financial strain for those involved.

High net worth individuals have the means to tap into complex asset structures and use them for their benefit. Whether it’s relocating assets, selling off valuable items or transferring funds abroad – these people can hide away wealth not always visible on paper. Businesses may be undervalued, luxury gifts might end up in hidden hands; all of which require careful scrutiny from those tasked with finding this money..

They may change their personal circumstances, such as resigning from their top-earning job or retiring early to manipulate their wealth and cause financial hardship.

Victims can find they have no access to funds, bank accounts or borrowing capability. Maintenance payments are frequently forgotten or neglected.

Withholding of finances is a common tactic used by abusers to coax victims into returning. It cruelly limits the victim’s freedom and leaves them without any other options, trapping them in an impossible situation with no way out.

However, it is important for victims to understand that there is support for them. Family lawyers have various tools they can use, including orders that require the abusive partner to leave the family home, interim maintenance orders to help meet needs while the case progresses, and freezing orders to prevent the disposal or sale of assets.