Leaving an abusive relationship is an incredibly difficult step and discovering that your financial identity has been damaged in the process can feel overwhelming.
Financial abuse often leaves a paper trail on your credit report, and a damaged credit report can be a barrier to securing housing or establishing a fresh start. However, your customer-owned bank can work with you to help restore your financial independence and apply the appropriate corrections to your credit file.
Understanding financial abuse and your credit
Financial abuse is a common element of domestic violence, where a person causing harm may misuse credit products to exert control, create debt, or damage your credit score.
The two most common ways perpetrators manipulate credit include fraudulent credit and coerced credit.
- Fraudulent credit: This occurs when a loan, credit card, or account is taken out in your name without your knowledge or authorisation. You are not liable for fraudulent credit.
- Coerced credit: This happens when you are pressured, manipulated, or forced into taking on a debt that you do not want. In these situations, you are typically only liable for the portion of the credit from which you received a direct benefit.
The consequences of abuse (including being prevented from earning or accessing money) can also mean you are unable to make your repayments which could lead to defaulting or even bankruptcy.
Lenders understand that the difficulties you are facing with credit may not have existed if the abuse had not occurred, and there are steps they can take to help restore your credit.
How your customer-owned bank can help
Reaching out for help after experiencing abuse is a significant step, and your customer-owned bank is there to support you at your own pace. You do not have to navigate this alone.
If you feel more comfortable having a financial counsellor or legal representative handle the conversations, you can authorise them to speak on your behalf.
When it comes to your credit, your bank has specific tools to correct your credit report based on exactly what happened. The approach your bank takes will depend on whether the debts were fraudulent, coerced, or simply disrupted.
What if the account was opened without your consent?
In this scenario, the bank will treat it as fraudulent credit. They should completely erase the entire credit record from your report, including the initial credit enquiry, the account listing, any negative repayment history, and any associated defaults. Similarly, if you were forced or coerced into signing for credit but received no benefit from the funds, the bank will take the exact same approach.
What if you were pressured into a debt?
The situation changes slightly if you were pressured into a debt but did receive some benefit from it. For this type of coerced debt, the lender can amend the account details rather than erasing the entire record. They will correct the credit limit and update your repayment history so that your credit report reflects only the portion of the debt you are genuinely responsible for.
What If the abuse prevented you from making payments on a legitimate debt?
Your customer-owned bank can protect your credit score from the ongoing impact of those missed payments. They may place a suppression on your credit report to hide any negative repayment history, or they might backdate a financial hardship arrangement.
Remember, you do not have to carry the burden of financial abuse on your own. Your customer-owned bank’s team is equipped to listen without judgment, prioritise your safety, and help you get back on track.
The Customer Owned Banking Association announced in 2026 it is partnering with the Australian Banking Association, the Australian Finance Industry Association and Arca to establish the Financial Safety Alliance. The Alliance, founded by social enterprise Flequity Ventures, will provide lenders with the tools to integrate financial safety by design principles into their products and services to minimise the weaponisation of financial products and give victim-survivors the support they need.
If you are experiencing problems with debt or other financial issues you can speak to a qualified financial counsellor for free by contacting the National Debt Helpline.
You can find out more about financial abuse and credit reporting here from CreditSmart which is a source of factual, independent information.