Recommendations to support economic abuse survivors in regaining their financial independence have been outlined in a report from banking and finance industry body UK Finance.
Economic abuse happens when the abuser restricts, exploits and sabotages their victim’s resources, such as mobile phones and transport, to maintain power and control.
Financial abuse can be an aspect of economic abuse, and includes the restriction, exploitation and sabotage of financial resources, for example by controlling the victim’s income, or coercing them to take out a credit card or a personal loan.
UK Finance said many financial firms are signed up to a financial abuse code and offer a range of support, but there is still more to be done.
In the report, David Postings, chief executive of UK Finance said: “Surviving Economic Abuse’s (SEA) research found that in the past 12 months over five million women have experienced economic abuse.
“Of these, 2.5 million had restricted access to their bank accounts, and 2.1 million had credit taken out in their name or had their credit rating deliberately destroyed.”
Financial ties like joint mortgages or child maintenance payments sent with abusive messages create an invisible chain to the abuser— Nicola Sharp-Jeffs, Surviving Economic Abuse
He continued: “Positive progress has been made but complex, emerging issues that prevent victim-survivors from regaining their financial independence and achieving economic safety must now be addressed.
“The financial services sector has a critical role, and we are committed to playing our part.”
The report’s recommendations include developing options to block payment references so customers can decide whether they see this information from a payer, as this can be a method for abusers to send messages to their victims.
It also recommended the development of a “tell us once” service for survivors to disclose abuse to multiple organisations.
A review of how coerced debt is reflected on credit files was also suggested.
Surviving Economic Abuse’s research suggests that on average, survivors have accrued debts of £27,000 split across five creditors and the consequences often outlast the relationship because of liability for the debts being in their sole name and the subsequent impact on their individual credit report.
There should also be clear and standardised information on how survivors can access professional legal advice, UK Finance said.
It also urged a quick pathway for economic abuse prosecutions.
We know that there can be complexities in helping victims regain control of their finances, and the recommendations in this report should help unravel some of these issues— Fiona Turner, UK Finance
Mortgage lenders should review their lending to allow a temporary and agreed adjustment when a survivor is looking to become the sole borrower on a joint mortgage, the report suggested.
Fiona Turner, head of vulnerability, financial inclusion and capability at UK Finance, said: “We know that there can be complexities in helping victims regain control of their finances, and the recommendations in this report should help unravel some of these issues.”
Nicola Sharp-Jeffs, chief executive and founder of Surviving Economic Abuse said: “Financial ties like joint mortgages or child maintenance payments sent with abusive messages create an invisible chain to the abuser, preventing them from moving on and safely rebuilding their lives.
“We look forward to working with UK Finance, the government, financial services firms and the regulator to implement the learnings in this report and, together, stopping economic abuse forever.”
Bim Afolami, Economic Secretary to the Treasury, said in the report: “As City minister, I am proud of the action taken to date by the sector to tackle this issue, demonstrated by the many positive initiatives being implemented to support victim-survivors in the prevention and aftermath of economic abuse.
“Although there is significant work taking place, this report shows we still have a way to go.”
Sheldon Mills, executive director, consumers and competition at the Financial Conduct Authority said in the report: “We will continue to work with industry, government and charities to raise awareness of this issue and to encourage the sharing of examples of good practice, so all firms learn from the experiences of others.”
Several banks or building societies, such as NatWest, Royal Bank of Scotland, Ulster Bank, HSBC UK and Nationwide, have been working to create “safe spaces” in branches for survivors of domestic abuse.
TSB also offers safe spaces as well as an emergency flee fund, making a payment of between £50 to £500, depending on individual needs, to support domestic abuse survivors.
Raghu Narula, managing director of customer engagement and distribution, retail banking at NatWest Group said the bank had donated £2 million in total to the SafeLives Circle Fund and opened safe spaces in more than 360 branches this year.
He said: “We’ll continue working with SafeLives and Surviving Economic Abuse to benefit from their expertise, so we can keep developing and enhancing our support for vulnerable customers.”
