Contrary to what most of us believe, financial abuse is not always an obvious problem.
Most of the time, we picture it in terms of a romantic partnership with a husband, domestic partner, or lover, and frequently, that is exactly what it is.
However, there are other instances of financial abuse that can happen, such as when parents abuse their children financially, when children financially exploit ageing parents, or when managers and employers forbid workers from raising concerns about their pay and financial rights at work.
Financial abuse is effectively the use of money as a weapon to manipulate another person in the most extreme way possible.
When a husband, partner, or lover is the earner, they may withhold or conceal their funds, but other times, they may be a financial leech.
People who abuse by isolating and controlling their partner frequently resort to financial abuse.
Combining financial resources is frequently a difficult task that frequently leads to misuse by one of the parties. Financial abuse can appear in a variety of ways, some of which are as follows:
- Granting an allowance while closely monitoring how money is spent or requiring purchase receipts;
- Depriving you of access to your pay check and depositing it in their bank account;
- Denying you access to or examining your financial accounts;
- Preventing you from working or restricting the number of hours you can work;
- Making you arrive late, depart early, or miss work;
- Convincing you to pursue a less lucrative career so that you earn less than they do;
- Using credit cards in your name without authorisation to the maximum limit or failing to make credit card payments, which can damage your credit score;
- Compelling you to submit phoney financial documents;
- Stealing from you, your friends and family, your credit, your possessions, or your identity;
- Taking money out of your kids' savings accounts without your consent;
- Refusing to work or assist with household duties while residing in your home;
- Refusing to provide you money to cover shared expenses such as food, clothing, transportation, or medical care and medication.
- Making you give them your tax returns or seizing joint tax returns.
- Keeping the family in debt despite the abuser's wealth in order to give the victim the impression that there isn't much money to go around.
There are various sorts with varying degrees of intensity, and it might involve your love partner, your parents, your siblings, or your employer. It's not as uncommon as we think it is.
What does that leave you with, then?
Damaged credit scores, access to bank accounts being denied, and being unable to open new accounts in just your name.
Sporadic employment histories with extensive gaps in employment history and out-of-date abilities that make it challenging to re-enter the workforce.
Legal problems and responsibility resulting from joint ownership of assets, false tax reports, or unknowing tax obligations.
Due to the lack of economic security and other potential options because of a lack of financial resources, many victims of financial abuse continue to be in these relationships.
It is a major factor in why women frequently continue to be in physically abusive relationships because they think they lack the resources to escape and survive.
Kenny Molina, Associate of Solutions and Analytics, at The Bahnsen Group, advises the following to get yourself out of this predicament:
Create and keep a safety net
Develop funds in your name alone, hidden from the violent partner. Try to repair or keep your credit.
To better understand your credit score, take proactive measures. You can make it more difficult for someone to open accounts in your name by freezing your credit accounts or requesting that a credit bureau issue a fraud notice.
Make achieving and maintaining independence a goal, and diligently work toward it.
Collect as much financial data as you can, including copies of contracts and other legal papers, credit card statements, social security numbers, birth certificates, and medical records.
Do not transfer your pay check into your partner's or a joint account
Instead, retrain and look for a job, even if it is different from what you were doing before you left the workforce.
Ask for assistance
Make a network of helpful people, and don't be embarrassed to ask for assistance.
Inform them of your predicament and ask if they can do anything to help. Contact nearby domestic violence support organisations or other counsellors if you can't get in touch with your close family or friends.
Molina asserts that the following steps may be taken in advance to prevent being a victim of financial abuse?
- Refrain from co-signing with a partner who has a track record of careless spending or late payments.
- Recognise and manage family debt.
- Avoid making payroll deposits into your partner's only account.
- Keep your money in accounts that are exclusively in your name.
- Whether one partner has a job or not, both should be aware of the home money.
- Pay attention to home financial talks.
Maintain your employability, even if you decide to be a stay-at-home partner, by always engaging in activities that preserve your attractive professional abilities.
Consider volunteering at a non-profit organisation where you may put your professional abilities to work.
Refrain from allowing a partner to persuade you to choose a professional position that pays less than other opportunities in order to ensure that you earn less than they do.
Define your limits, and don't let your spouse use money abuse or manipulation to make you completely dependent on them or the other way around. Financial abuse and manipulation may go both ways.
Financial abuse of children by guardians
Parents are aware of the personal information, including name, address, Social Security number, and birth date, that is required for many financial products.
Most parents don't intentionally deprive their kids of money; instead, it's because they're having trouble paying their bills, which may lead them to resort to desperate means like getting a loan or using another credit card.
According to Molina, Examples of parental financial abuse of a child's finances include as follows (the child can be an older child):
- Get a credit card opened in the child's name and use it to accrue debt that the parents are unable to fully pay off.
- Borrow money using the child's details and then default on it.
- Get a house loan using the child's details.
- Co-sign a loan for more money than the child requires and then use the extra cash.
- Requesting consumer items in a child's name, such as a smartphone, and failing to pay the bill, which is subsequently sent to collections in the child's name.
You should check your credit report, put it on hold, and have a talk with your parents to ask them to stand up and accept responsibility if you learn that your parents have exploited your identity to get credit cards or loans.
Following that, you need to take action to repay the debt. Begin by getting in touch with the lender to work out a payment schedule, advised Molina.
The elderly are also victims of financial abuse
Elder financial abuse is on the rise, and family members and caregivers are frequently the offenders.
According to the National Centre on Elder Abuse, family members account for 57.9% of those who exploit older individuals financially, followed by friends and neighbours at 16.9% and home health aides at 14.9%.
Family members frequently turn to a senior parent's assets in an effort to get out from under their financial, gambling, or substance addiction problems.
The abuser could have a durable power of attorney or a power of attorney for the elder, or they might have joint bank accounts that they can access whenever they want, according to Molina.
Family members and caregivers frequently abuse checks, credit cards, and ATM cards.
They could only take goods, money, or property. They might "borrow" money without ever planning to pay it back, cash or sign pension or social security checks without authorisation, or establish a deed or title transfer to transfer money and property to oneself without the elder's agreement.
In order to save money for an inheritance, necessary care - including prescriptions, durable medical equipment, and more - may be withheld.
Unpaid bills and eviction notices, unexplained withdrawals from bank accounts or transfers to other accounts, particularly joint accounts with the abuser, and other unusual activity in their accounts, such as illogical care charges that seem inappropriate, are all warning signs of elder financial abuse, according to Molina.
"Seniors are a very vulnerable population, and the best way to prevent future abuse is for seniors to prepare in advance with directives and powers of attorney appointing a trusted family member, friend, or advisor," says Kimberlee Davis, a specialist in personal wealth advising and oversees financial and retirement planning solutions for high net worth individuals and multi-generational families.
“If you suspect a senior is being exploited financially, consult an adviser or attorney to identify the best course of action. Have the abuser's power of attorney immediately removed if they do”.
Financial abuse by your employer
When a supervisor or employer responds angrily and threateningly to an employee, who asks inquiries about financial arrangements and remuneration, financial abuse can happen in the workplace.
You should, in this case, speak with the human resources department, your boss's superior or get legal advice. To back up your assertions, it's a good idea to keep a record of your talks with your supervisor and his responses.
Although it may not always be apparent to others, financial abuse can happen and may undoubtedly stop the victim from behaving freely and independently and wreak havoc in their lives.
Therefore, it is essential that we assume responsibility for understanding the financial realities of our life and exercise caution while engaging in financial activities and forming affiliations and partnerships.
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