‘It felt like being mugged’: 61 forms of economic abuse detailed to MPs

Tuesday, 26 November 2024

Non-bank lenders hope to have a draft economic abuse code written by Christmas.

Economic abuse is a little-recognised form of family violence, often going hand-in-hand with physical and sexual violence.

But though individual power providers, lenders or telecoms companies may try to identify and help victims, no industry codes exist to guide them, or set them standards they promise to adhere to.

At a gathering in Parliament on Tuesday to mark International Economic Abuse Awareness Day, Lyn McMorran, chief executive of the Financial Services Federation (FSF) of non-bank lenders, outlined the organisation’s plan to become the first industry association to publish a code on economic abuse for its members.

It was working on the code with Good Shepherd, a charity which helps women, girls and their families who are experiencing harm and hardship, including by negotiating with lenders over debts and sometimes getting the lender to forgive them.

Emma Saunders, Good Shepherd’s chief executive, said further codes of practice would be created with the power, telecoms and financial advice sectors next year.

Dr Ayesha Scott, senior lecturer from AUT’s Business School, is an expert on violence against women and personal finance, explains why economic harm happens, and predominantly impacts women.

While men are sometimes subject to economic abuse by controlling partners, more women suffer it, and to a more damaging degree. Research in 2019 suggested as many as 16 in every 100 women reported they had suffered at least one form of financial abuse, compared with 11 in every 100 men.

McMorran said the aim of the code was to help FSF members identify signs of economic abuse, and respond appropriately to it, which at times could mean forgiving debts when people were coerced into incurring them.

MPs attending the gathering at Parliament, including Minister for Women Nicola Grigg, were shown the bewildering number of ways economic abusers sought to control, manipulate, and sabotage victims.

Good Shepherd presented them with a list of 61 forms of economic abuse identified in interviews with 14 women escaping violent and coercive relationships.

They also received written testimonies from women who had suffered economic abuse from intimate partners, including the speed at which coercive behaviours emerged.

“Within the first six months of being married, I was in debt. It felt like being mugged — like you’ve been stood over by your husband and he’s saying ‘I need your card. I need to take your card’,” said one.

“My husband isolated me from friends, family and my income. He would have the newest phone and the best shoes but we couldn’t afford formula for the baby,” said another.

“When we had our first child, I stopped working so I could take care of the baby. As my money dried up, my husband started to take out credit — in my name,” said a third.

MPs were given harrowing testimony from women who had suffered economic abuse at the hands of intimate partners.

“Any debt was taken on in my name. I knew this and I signed on to things because if I didn’t he would get angry and scream, or do things like driving dangerously on purpose when me and the baby were in the car.”

Sometimes the behaviour involved addictions to drugs, or alcohol, women’s testimonies handed to MPs showed.

The 61 forms of economic abuse MPs saw included restricting access to money, hiding money and spending, and controlling accounts.

In the Family Violence Act, economic abuse is listed as one of the forms of “psychological abuse”, which the act recognises as a form of family violence alongside physical and sexual violence.

Economic abuse was a frequent tactic of people who used violence in relationships.

Emma Saunders, Good Shepherd’s chief executive.

Saunders said Women’s Refuge had found six in 10 women who sought shelter with it reported economic abuse, but it might be higher as sometimes it took people escaping abusive relationships time to understand the full extent of abuse they have suffered.

Often people were left with large debts after they finally managed to escape an abusive relationship, Good Shepherd has found.

They were often also left with damaged credit scores which made life harder and more costly, including hampering their ability to rent homes or borrow money at reasonable rates.

The country was given a view into a relationship in which control of finances was held elsewhere when Auckland eye surgeon Philip Polkinghorne stood trial, and was cleared, of a charge of murdering his wife Pauline Hanna.

Forensic accountant Margaret Skilton told the Auckland High Court that her observation was Polkinghorne had “control” over Hanna’s financial position by being a signatory on a joint account and sole authority on the other accounts.