Financial abuse: How to recognize it and tips for protection

October is National Domestic Violence Awareness Month. Although many tend to associate domestic violence with physical harm, there are other forms of abuse that victims experience.

According to the Pennsylvania Coalition against Domestic Violence, “financial abuse occurs in 98% of abusive relationships and is the number one reason victims stay in or return to abusive relationships.”

The same site reports that “78% of Americans don’t recognize financial abuse as domestic violence.”

In other words, the signs of financial abuse are not clear, well known or even recognizable as a real form of abuse to the average person. If someone is a victim of financial abuse, they or even those close to them may not recognize that it’s happening.

If you are concerned that you or someone you care about might be in a financially abusive relationship, here’s more information on how to spot the signs of abuse and what to do to overcome it.

See related: Navigating financial help when leaving an abusive relationship

What are the signs of financial abuse?

Financial abuse is an extension of abusive behaviors within a relationship. If someone is experiencing physical and emotional abuse, financial abuse can be a part of the equation.

Financial abuse boils down to taking control of finances in a manner that harms or places the victim at a financial disadvantage. Another aspect is that financial decisions are unilateral and coerced in abusive situations.

Financial abuse can manifest in one or more of the following ways:

• Controlling your access to money
• Attempting to ruin your credit by not paying bills on time or opening new credit in your name
• Using your name and personal information to commit financial fraud
• Showing up at your job to make a scene or slandering you to your employer in attempts to get you fired
• Destroying jointly-owned property or your personal belongings
• Insisting that you turn over all money for the abuser’s use without discussion or agreement
• Deliberate mismanagement of jointly-owned funds or assets like a checking account, business or investments
• Dissipating (spending away) jointly-owned funds through addiction or careless spending in general
• Criticizing abuse victim’s ideas and decision-making when it comes to finances or never agreeing to discuss financial decisions that impact both parties in the relationship
• Manipulating others against their victim, giving them gifts, money, etc.

Who experiences financial abuse?

Contrary to popular belief, financial abuse doesn’t just occur between intimate partners, like spouses or other romantic relationships. Also, victims can be male or female. A variety of relationships and profiles of people can experience financial abuse, including:

• Parents and children (or other relatives)
• Employers and employees
• Caregivers and clients
• Churches and congregants

Keep in mind that financial abuse can go in either direction. For instance, financial abuse by parents can occur, while children can also do the same to their parents. Caregivers can abuse their clients and vice versa. Although the power dynamic tends to follow typical patterns in most abusive situations, it’s important to recognize atypical presentations of financial abuse to watch out for.

Nicole Middendorf, a wealth advisor and Certified Divorce Financial Analyst (CDFA), described how financial abuse might play out between spouses: “One spouse handling all the money and the other not knowing how much they have, where it is, how it’s invested etc. Oftentimes in a relationship, one spouse will handle the majority of it. Still, when it is not a joint decision, and you are unaware of your financial circumstances, that is when there is a problem.”

Mary Kate D’Souza, the Chief Legal Officer of an online estate planning software solution, says she’s noticed an uptick of elder abuse that includes financial exploitation.

“Elders are increasingly victims of financial exploiters both known and anonymous. Generally, vulnerable elders are preyed upon by either emotional manipulation or, in the case of some scammers, by the false promises of a ‘get rich quick’ scheme.”

In some cases, D’Souza has seen single women fall prey to financial abuse. Still, it’s not something they always admit to or realize is happening, “Like other forms of abuse, the victims often defend the abusers and justify the abuse rather than admit to the evidence of theft in front of them.”

What are the effects of financial abuse?

In the short term, having access to your finances is critical to staying safe. If you’re unable to access your money, safely safe and affordable housing may be unavailable. Many survivors return to their abusive partners with the fear of homelessness looming overhead (put in place by the abuser).

When it comes to long-term effects, things like ruined credit scores and legal issues caused by the abuse can make it difficult to gain financial independence and long-term security.

The short and long-term effects of financial abuse can be destructive, but it’s important to note that they should not be a reason to endure the abuse. With the proper resources and support, gaining back control of your finances is possible.

How can I prevent financial abuse?

If you’re worried you or someone you know might become a victim of financial abuse, here’s what you should do next:

Watch out for red flags

Abusive personalities and entities can be hard to spot from the beginning. Whether you are entering a romantic relationship or hiring a caregiver for your elderly parent, a background check could be a good idea.

Ben Hartwig of online public records search company, InfoTracer, says to strongly consider using “tools that find public records about your potential abuser to check if they have any priors or criminal history.”

Engage your support network

If you are entering a relationship or situation where abuse could be a factor, keep your support circle abreast of what you are experiencing and in your interactions. If you’ve got a trusted friend, relative or therapist, their input can go a long way.

D’Souza adds that family members should work together. “In order to protect against financial abuse, loved ones should have frequent contact with vulnerable family members.”

Separate your finances

If you’re in a relationship where you’ve already combined finances and you begin to experience financial abuse, do what you can to separate your finances.

This might mean removing your abuser from bank accounts, credit cards or other jointly held property. (If you are married, you may need to contact a lawyer first.) Also, if making this move would put you in danger, consider opening accounts in your name only.

See related: Authorized user: My ex won’t remove me from card accounts

Get legal help

If you are in a relationship bound by a legal arrangement such as a marriage or employment, you may need to engage the help of a legal expert before taking action. If you are experiencing financial difficulties from financial abuse, free legal aid resources can help you sort through your options in financially abusive situations.

See related: Divorce hits women harder financially: Here’s how to survive it

What can I do if I am experiencing financial abuse?

Financial abuse in relationships is intentional and cruel, but it is something that you can escape and even recover from. While it’s helpful to recognize the red flags early on, it’s important to know that even if you’re in the thick of it, leaving an abusive situation is possible.

Here are some resources and tips that can help you or someone you love to address financial abuse:

Connect with domestic abuse resources

As mentioned, financial abuse and domestic abuse are closely related. If you can get help for domestic violence, it can often cover strategies to protect yourself financially in abusive situations.

If possible, place a call to the National Domestic Violence Hotline at 1-800-799-7233 (SAFE) or visit their website where they’ll connect you with local resources that might include counseling, legal help, housing options and more.

Keep records

Although it may be challenging amid turmoil, knowing how to prove financial abuse can provide protection and potentially recompense.

Financial abuse is recognized as an illegal activity in several states, so you may have grounds to press charges against your abuser and having records can prove your case.

David Clark, a lawyer and 35-year veteran practicing law in Michigan and throughout the U.S., mentioned how some states handle financial abuse.

“Financial abuse is prohibited and considered either a felony or misdemeanor by federal and state laws. It is committed by using threats or instilling fear to control and manipulate the victim.”

“As a misdemeanor, this crime is penalized by imprisonment of up to 364 days and up to $1,000 in fine. As a felony, it is penalized by imprisonment of up to four years and up to $10,000 in fine.”

Sadly, many abusers often operate covertly, making it difficult to bring them to justice. Unless there’s an intentional, coordinated effort to hold them accountable, including concrete proof of their behaviors, they will continue the cycle of abuse. The good news is that you’ve got plenty of options to keep track of your financial situation to prove financial abuse.

For instance, you can keep records of your financial activity and set up credit monitoring services to alert you of suspicious activity. You can also keep personal records of incidents that could be classified as financial abuse, such as unauthorized access or use of your funds in your personal accounts.

Be discrete

Getting help in an abusive situation can be challenging on many fronts. If you are concerned about your physical safety, be as guarded as possible while collecting proof and planning to escape an abusive situation.

Be patient

Whether you are leaving an abusive situation or helping someone in an abusive situation, patience is key. One of the reasons financial abuse is so insidious is the mental toll abuse takes on victims. Abusers can successfully keep their victims in an abusive situation because there is a great deal of mental control that can be incredibly hard to shake.

If you or someone you love is experiencing any type of abuse, it can take time to realize abuse is happening, plan to leave the situation and then actually execute the escape plan. Abusers are known to make it very difficult for their victims to leave by becoming more abusive. They may threaten violence, slander their victim, seek to cut off their support system (which can include finances) or resort to several other escalated abuse tactics.

Some people are just not ready to experience more pain as they attempt to leave an abusive circumstance. If this is you, be patient with yourself and take action when you are ready. If you are helping another person, be patient with them and avoid pressuring them to make decisions they may not yet be ready for.

The bottom line

No one ever expects to become a victim of financial abuse. Although it can be a horrific thing to experience, it is something that can be addressed and overcome. Remember to be patient with yourself (and others), seek help and maintain hope for the future you have beyond this circumstance.