Minimising the Risk of Financial Abuse

In this Key Learning Area we will discuss some practical ways in which you can protect yourself from the risks and impacts associated with financial abuse.

Preventing Financial Elder Abuse
ADA Australia (2.30 Mins)

How to reduce your risk of financial abuse

There are a range of precautions that you can take to protect yourself from financial abuse. Below are some suggestions, but these should be considered as general advice only as each person’s financial, home and family situation is different. You should not hesitate to seek professional advice and support to put in place as many protection strategies as possible.

Suggested precautions …

  1. Maintain a separate bank account that only you can access. If necessary, this may need to be kept secret and with an alternative financial institution. Try to keep a reasonable amount of funds in this account, in case of an emergency. Make sure that you keep these account details secure, so no-one else can access either in person or online.
  2. Make sure that all utility bills are in joint names.
  3. Keep important personal documents, jewellery and other valuable items in a safe place, that only you can access.
  4. If working, explore salary sacrificing into your super account to realise tax benefits, reduce your take home pay and build your own retirement nest egg.
  5. When buying a joint property, consider establishing Tenants in Common or another legal arrangement, that make you the legal owner of an agreed proportion of the property e.g. 50% and only responsible for that share of the debt.
  6. Organise to pay joint bills/debts using direct debit arrangements.
  7. Closely monitor bank statements for any usual activity e.g. unexplained withdrawals of cash or credit card purchases. If there is any unusual activity, contact your financial institution straight away.
  8. Keep credit card limits to a small amount and ensure that this limit cannot be increased without your authority.
  9. Do not keep large amounts of cash at home, or in your purse or wallet.
  10. Make sure you have an up-to-date, professionally prepared Will, Financial Power of Attorney and other estate-related documents. Try to avoid having only one person with control over your financial affairs i.e. partner or one child.
  11. Do not be pressured into selling assets that are in your name, to reduce joint debt, complete renovations on jointly-owned properties or to make other investments, unless you feel entirely comfortable doing so.
  12. Do not sign any documents unless you fully understand what you are signing. If you have any doubts, speak to a trusted family person, friend or advisor.
  13. Seek free legal and financial advice. You are entitled to receive this assistance, advice and support, so make the most of it. You may also wish to pay for professional services.

Reflection

Are you or someone you know being asked or pressured to do something that you don’t understand fully, or doesn’t feel right? Then trust your instincts! Don’t do anything until you have been able to speak to someone you trust.

What does the evidence say?

Victims of financial abuse can be forced to pay higher or additional household bills and other expenses where the perpetrator refuses to contribute to household expenses. In some cases, perpetrators force victims to pay all household bills or a disproportionate share of household bills. For example:

  • 46 per cent of respondents experiencing financial abue in a 2014 Australian survey reported that their partner put their name of all the utility bills for electricity, gas and water; and
  • in an Australian survey of 125 victims of financial abuse, 15 per cent of respondents reported that their partner used their name to take out loans or borrow credit.

(Source: ‘The cost of financial abuse in Australia’, Deloite Access Economics 2022)