Warning: This blog will discuss a topic that some may find distressing or upsetting. Please, if you are uncomfortable reading about abuse in any form, leave the page. If you are a current victim of abuse, whether it’s physical, emotional, or financial, SEEK HELP IMMEDIATELY. The Government of Canada website has a page for family violence resources and services that you can use to find help now.
Abuse is a very sensitive, difficult-to-talk-about subject. However, it doesn’t start and stop with physical harm alone. There are other ways for abusers to hurt and manipulate their victims. For example, some abusive relationships may involve emotional or financial abuse in place of (or in addition to) bodily harm.
What is financial abuse? How can you identify if yourself or a loved one is the victim of financial abuse (it isn’t always obvious, so it helps to know the warning signs)? And, how can you or your loved ones deal with debt after escaping from financial abuse?
What Is Financial Abuse?
Financial abuse is a common tactic in domestic violence situations. In elder abuse scenarios, financial/economic abuse is the most common form of abuse. Economic abuse can happen in place of or in addition to physical and/or emotional abuse. For subtler abusers, emotional manipulation can be employed as part of financial abuse.
For some abusers, financial abuse can be a different way to exert control over their victims. After all, if they can gain control of their victim’s money, it becomes that much harder for the victim to gain independence.
Financial abuse is typically defined as “the illegal or unauthorized use of someone else’s money or property.” This can include obvious fraud or theft (such as outright stealing someone’s money or assets) or less clear-cut activities such as an abuser pressuring their victim to use money or property for the abuser’s benefit.
It can also involve making an abuse victim more dependent on their abuser. For example, the abuser might try to manipulate the victim into leaving their job and put them on an ever-shrinking “allowance” to keep them dependent on their abuser to meet basic needs.
Another example would be if you have a cheque mailed to your home and someone in your household takes it, cashes it in your name, then keeps all (or even a part) of the money without your permission. That would be a clear-cut case of theft or fraud and is also a form of financial abuse.
Financial abuse isn’t always obvious to the abuse victim, as it can happen incrementally, over time. They may be pressured to give the abuser money with gaslighting phrases like “I do a lot for you” or “you love me, right? So, pay this bill for me!” Over time, the victim may be defrauded for a large amount of money, but never realize that they were being subjected to financial abuse because they agreed (after being pressured) to spend that money.
5 Warning Signs of Financial Abuse to Watch For
Recognizing financial abuse and separating it from the normal, everyday financial decisions that are made by loving couples or cohabitating family members can be difficult. This is why it’s all too easy for someone suffering from financial abuse not to see just how abusive the relationship has become.
With this in mind, here are a few warning signs of financial abuse to watch out for:
1. Employment Sabotage/Pressure to Quit Employment
Instead of taking money from their victims, some abusers instead try to make their victims more dependent on them financially. The abuser might try to sabotage the other person’s employment or pressure them to quit so they can’t achieve financial independence.
Some examples of financial abuse that involve employment sabotage include:
- Frequently harassing the victim at work to keep them from focusing or performing well.
- Physically harming the victim outside of work to keep them from showing up.
- Harassing the victim’s coworkers to create a more hostile work environment or ruin workplace relationships.
- Submitting anonymous complaints about the victim’s performance at work.
The goal of these actions is to either get the victim to quit work or to get them fired due to poor evaluations. Being unemployed can leave the victim in a vulnerable financial position, making them more dependent on the abuser.
2. Acting Entitled to the Victim’s Money or Assets
One of the subtler signs of financial abuse that might be hard to notice as an outsider is an abuser acting entitled to their victim’s money or assets. For example, the abuser might “require” or “ask” the victim to hand over their paycheques, bank accounts, or other financial assets, coerce the victim into paying their bills or other expenses or demand to be bailed out if they’re in debt.
This can be hard to spot from the outside because, as an outsider, you aren’t always aware of the nature of the financial relationship between others. For example, when Ralph and Betty are eating out, Ralph always pays. So, you might assume that he’s being nice. What you don’t know is that Ralph takes all of Betty’s paycheques and puts the money in his account so Betty can’t afford to pay for dinner.
3. Insisting on Being the One in Control of All Assets in the Relationship
This is another warning sign that can be hard to spot from the outside if the victim doesn’t speak up about the situation. Here, an abuser might insist that they be the one in control of all of the financial assets in the relationship—bank accounts, credit cards, mortgages, etc. They may demand that the victim co-signs a loan or enters into a joint bank account with them.
There may be excuses given for this behavior. For example, the abuser might claim to be better with money than their victim. They may even cite financial qualifications that they have (if they have them) to justify taking control of the finances.
Of course, there are situations in healthy relationships where one partner might assume control of the finances. However, if you’re in a relationship where the other person is insisting that they take control of the finances despite your proven ability to handle them yourself and repeated insistence that you be allowed to control your own money, it may be financial abuse.
Some abusers might seek to gain a power of attorney (or try to forge one) to add legitimacy to their claims that you “agreed” to put them in control of your money.
4. Hiding Assets in the Relationship
To prevent a victim from gaining financial independence or to manipulate them into thinking that the abuser is in need when they aren’t, some abusers might hide some of their assets. This keeps the victim from accessing those assets when they might need them and makes it harder to achieve independence.
On the reverse, a victim who is struggling to escape an abusive relationship may start trying to hide away money or other assets themselves. This way, they can build up enough money to try to escape their abuser.
In either case, a “couple” hiding assets from one another can be a warning sign of abuse.
5. Intentionally Damaging the Victim’s Credit Score
A credit card or bank loan can give abuse victims enough leeway to escape a bad relationship and move far out of their abuser’s reach. To prevent this, an abuser may try to intentionally tank their victim’s credit score to keep them from qualifying for a new card or loan.
For example, the abuser might commit identity theft and sign their victim up for a new credit card—then neglect to pay it back after racking up enormous debt on personal spending. When the victim applies for a card themselves, they may find that they don’t qualify because their credit score is so low. Worse yet, they may find themselves on the receiving end of harassing collection calls without knowing why.
If you suspect that you or a loved one has become the victim of identity theft, please report it as soon as possible. For example, you could call the Canada Revenue Agency at 1-800-959-8281, contact your bank, and check with your province’s identity theft resource page for help and advice.
By working with authorities and the credit bureaus, you may be able to get the identity theft-related activity cleared from your credit history and rehabilitate your credit score.
Get Help with Managing Debt after Experiencing Financial Abuse
If you or a loved one has been the victim of abuse, seek help as soon as possible. Reach out to the authorities and your loved ones for advice and support.
The results of financial abuse can feel impossible to overcome, but there is help available. Our certified credit counsellors have decades of combined experience supporting Canadians with debt in almost every situation. If you’re experiencing financial insecurity and overwhelming debt, you have options.
Contact one of our credit counsellors today for a free consultation about your debt.
Listen Now: Meseret Haileyesus, the Executive director of the Canadian Center for Women’s Empowerment joins Credit Canada CEO Bruce Sellery on his Moolala podcast to discuss the significant implications of Economic Abuse, the systemic barriers faced by victims, and how we can work to overcome them.
Newcomers & Money 101 Guidebook
Credit Canada Debt Solutions developed a guidebook on basic personal finances for newcomers to Canada, in partnership with the Ministry of Citizenship and Immigration.