6 banking changes needed to help victims of financial abuse
More changes are needed to help victims of financial abuse regain their independence, trade body UK Finance is warning.
Many banks and financial firms are signed up to a voluntary code of practice and have a range of measures in place, such as flee funds and safe spaces available in branches. However, UK Finance said more can still be done in three key areas.
Here, Which? takes a look at the recommendations put forward by UK Finance and explain what features banks currently have in place to support victims.
What is financial abuse?
Financial abuse covers a broad spectrum – it could be a carer taking an extra £10 from their client’s purse, or a husband controlling their wife’s everyday spending. Abusers can be romantic partners, family members, friends or carers.
It could also be that someone is building up debts in your name, forcing you to pay for their goods, accessing your financial accounts without your permission, or manipulating you into signing over property.
Financial abuse is often part of wider economic abuse; it can mean controlling other resources such as housing, transport, employment and clothing.
In 2021, the Domestic Abuse Act was updated to legally recognise economic abuse as a form of domestic abuse.
According to the charity Surviving Economic Abuse (SEA), in the past 12 months, more than five million women have experienced economic abuse. Of these, 2.5 million had restricted access to their bank accounts, while 2.1 million had credit taken out in their name, or had their credit rating deliberately destroyed.
- Find out more: how to spot the signs of financial abuse
Financial abuse: three key areas
The new report, From Control to Financial Freedom, published this month by UK Finance shed light on the obstacles faced by victims when trying to separate their finances from their abuser.
Nicola Sharp-Jeffs, founder of SEO, said financial ties like mortgages or child maintenance payments sent with abusive messages ‘create an invisible chain to the abuser’, which can prevent victims from moving on.
Here are the main issues identified:
Debt
Research from SEA found 60% of financial abuse victims have been coerced into debt, with average debts of £27,000 split across five creditors.
The report said UK Finance members such as banks are committed to supporting these victims and voluntarily writing off debts on a case-by-case basis. But according to SEA, just one in four of these debt write-off requests is successful.
- Find out more: free debt advice contacts
Separation of joint financial products
The report found that separating joint financial products sounds simple, but can be very complex depending on the products involved, the legal status of the relationship and the level of co-operation from each party.
For example, discharging the liability of a mortgage usually requires it to be repaid. But this might only be possible by selling the property and paying back what is owed to the lender. However, one party may want to remain at the property, or might be unable to move.
- Find out more: 6 financial mistakes to avoid when going through a divorce
Abusive payment references
When banking details are known, or payments are required to be made from the perpetrator, such as for child maintenance, victim-survivors have reported that the payments systems can be misused to contain abusive words and messages in the payment reference field.
Last year, challenger bank Starling launched a ‘hide references’ feature that can mute unwelcome abusive references that could accompany bank transfers.
What recommendations have been put forward?
UK Finance has come up with several recommendations that the government, the charity sector and financial institutions can take action on.
Here are six key banking recommendations in more detail:
- Development of an option to block payment references, so customers can decide whether to see this information from a payer.
- Development of a Tell Us Once service, whereby victims could disclose abuse to multiple organisations without having to repeat themselves.
- A commitment across financial services to accept the Economic Abuse Evidence Form, an information-sharing tool to allow qualified money or debt advisors to tell an organisation that someone has experienced economic abuse.
- A review of how coerced debt is reflected on the victim’s credit file.
- The Consumer Credit Act should be revised to include guidance on how to split joint unsecured debt where there is no consumer agreement or court order.
- Mortgage lenders should review their lending to allow a temporary and agreed adjustment when a victim-survivor is looking to become the sole borrower on a joint mortgage.
How your bank can help now
Several banks have a range of measures to support victims.
Many banks and building societies including HSBC, Metro Bank, NatWest, Nationwide, the Co-operative Bank, TSB and Santander are part of the Safe Spaces scheme. These are areas in branches where domestic abuse victims can visit to call a support service or helpline, or phone a friend.
TSB has an emergency flee fund to support victims fleeing domestic abuse. It will offer a payment of £50-£500, which can be used to assist victims with the cost of essentials such as travel, clothing and toiletries.
Several banks also offer ways for victims to communicate with them discreetly. Lloyds Banking Group has implemented ‘quick exit buttons’ on their websites so that victims can exit financial abuse-related web pages quickly without leaving any browsing history. The Co-operative Bank has an online economic abuse disclosure form, so victims can inform it of the abuse when it is safe to communicate.
Meanwhile, Lloyds, HSBC and Barclays offer non-geographical sort codes, to prevent a perpetrator from knowing the victim’s whereabouts.
- Find out more: how your bank can help protect you from financial abuse
Where to get support
If you’re experiencing financial abuse by a partner or ex-partner, you can contact the Financial Support Line, run by Money Advice Plus in partnership with Surviving Economic Abuse, on 0808 196 8845 for specialist help and support. Lines are open 9am-5pm, Monday to Friday. You can also visit its survivor forum at survivingeconomicabuse.org.
If you’re concerned about an older person experiencing financial abuse, or are in this situation yourself, you can contact Hourglass on its 24-hour helpline – 0808 808 8141 – or visit wearehourglass.org. Alternatively, contact your local adult social services.
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