Sector News

Financial abuse: How to protect customers and stop banking products from being weaponised


Financial abuse is a form of domestic violence which one in six Australian women experience during their lifetime.

Banks have an important role to play in protecting customers and ensuring their products are not weaponised by perpetrators according to Catherine Fitzpatrick, business advisor to the Federal Government on its National Plan to End Violence Against Women and Children and Founder & Director of Flequity Ventures.

“We don’t want any bank to be a safe haven for abusers, which is why every single bank needs to act now” she says.

We spoke to Catherine about the action she would like to see Australian banks take against financial abuse, which banking products are weaponised most, and the innovative new products she would like to see on the market.

The impact of financial abuse

One in six (16%) Australian women experience some form of financial abuse according to ABS data[1], and the direct cost borne by victims/survivors is estimated to be $5.7 billion per year[2]. Women are more than twice as likely as men to experience economic abuse.

Financial abuse is prevalent in almost all (99%) cases of domestic violence[3], and it is a common tactic used by abusers to gain power and control in a relationship.

“Everyone, including businesses and banks, have a role to play if we are going to meet the ambition of ending gendered violence in a generation,” Catherine says.

“Research shows that women are more likely to talk to their bank than to a specialist family violence service provider. This is because money gives you choices, which includes the choice between leaving or staying, so banks have a really important role to play in helping victims/survivors get some financial safety,” she explains.

Financial abuse and banking

Financial abuse can include taking away a victim/survivor’s access to money, manipulating their financial decisions, or using their money without consent.

When it comes to banking and financial products, some examples include:

A perpetrator opening a credit card in the victim/survivor’s name without their knowledge or consent, and then racking up debt against their name.

Joint accounts are ripe for financial abuse. For example, in a joint mortgage, a perpetrator may refuse to pay the mortgage payments and take out all the money from the offset account without the knowledge or consent of the other person.

Stalking someone’s purchase behaviours and whereabouts through purchase descriptions.

Leaving abusive messages through digital bank transfer descriptions.

How to disrupt financial abuse

In 2022, Catherine wrote the Designed to Disrupt paper, in which she explored what would happen if financial service providers disrupted financial abuse and made it harder for products and services to be weaponised by domestic abusers.

In her view, the first step a bank should take is to update its Terms & Conditions to state that they don’t want their products to be weaponised in the context of domestic violence, and that there will be consequences for those who misuse their products.

“There are a number of drivers for gendered violence, and one of them is that we condone inappropriate behaviours or beliefs. That is why it’s important for banks to make it clear that they don’t want anyone to misuse their products for domestic abuse,” she explains.

“We now have a number of Australian banks that have updated their T&Cs including several customer owned banks, and I would encourage every single COBA member to do this,” she adds.

Product risk assessment

The second step she recommends banks to take is a risk assessment, which means understanding the risks of their products being misused and considering how to prevent this abuse.

From her conversations with victims/survivors, consumer advocates and the women’s safety sector, Catherine says joint accounts and digital banking are the most problematic banking products.

“Financial abuse often starts or escalates during a separation, so this is when you might see a perpetrator drain the money in a mutual mortgage offset account. Ensuring that both account holders have separate logins and passwords is a step in the right direction,” she says.

However, she would like to see a new mortgage product designed that makes it easier to separate an account when the two account holders go their separate ways.

“The mortgage currently is designed for two people who are expected to be happy together for 30 years, which does not reflect modern society. In reality, one in three marriages break down and following a separation, it takes a woman an average of five years to recover financially,” she explains.

“What I would like to see is a bank designing a product that makes it easy for a mortgage to basically separate with the customer – this is my challenge to COBA members to design!” she adds.

Catherine would also like to see a mortgage in the market that allows a single mother who has experienced domestic and financial abuse to stay in the home while she gets back on her feet, instead of being forced to move to a rental property where she most likely will pay weekly rents that are higher than the mortgage.

“We know from research that if we give a victim/survivor some breathing room and stability, if the kids can stay in the local schools, if she can get or stay in a job and start rebuilding her life, then that recovery period means she can recover financially and look forward to thriving again,” she says.

More friction in the system

Online banking is the preference for an increasing number of Australians, but it also gives perpetrators the opportunity to login and make changes without the victim/survivor’s consent or stalk them by looking at purchase descriptions.

“As we move towards a digital economy, banks need to be aware that joint accounts in particular are highly likely to be weaponised, and changes should be considered to provide greater protection,” she explains.

She would like to see banks put more friction in the system to disrupt financial abuse online.

“For a credit card application, you might want to include two factor-authentication which means there is a better chance of intervening if somebody is applying for a credit card in another person’s name,” she says.

The importance in believing the victim

When it comes to interactions between bank team members and victims/survivors, Catherine advises to lead with empathy.

“No one expects a bank employee to be a psychologist, social worker or a counsellor. You just need to be human. So, if someone tells you they are experiencing domestic abuse, you should believe them, and ask ‘How can I help you'”, Catherine says.

On average, it takes a victim/survivor seven times to leave a violent relationship.

“That’s why it’s so important that if someone does disclose what is happening to them, that you believe them. If you don’t, they may never seek that help again, and instead go back to a difficult and potentially life-threatening situation,” she explains.

She also emphasises that it is important for the customer service representative to be guided in the conversation by the victim/survivor.

“For someone who is being controlled and is experiencing domestic violence, they’ve had the ability to choose taken away from then, so it is really important for the bank team member to be guided by the victim/survivor,” she advises.

A global perspective

Following her Designed to Disrupt report, Australian banks are considered global leaders when it comes to updating their terms and conditions to take a stance against financial abuse, as well as addressing abuse in payment descriptions by blocking bad language.

But there are some lessons to be learned from other countries.

Britain’s biggest building society Nationwide recently announced it was rolling out safe spaces for domestic violence victims across its more than 400 bank branches.

In the UK, some banks have also taken steps to mask transaction descriptions, which makes it harder for a perpetrator to stalk a victim/survivor.

Respect and Protect campaign

At the end of May, Catherine will be launching Respect and Protect; an education campaign to encourage banks and other businesses to set an expectation to foster respect amongst their customers and protect them from financial abuse.

“The campaign will showcase businesses that have or are committed to taking action. It will encourage others to join and take a stance, saying ‘We don’t want our products weaponised, and we don’t we don’t want to be part of financial abuse'”, she says.

To find out more about this campaign, follow Flequity Ventures on LinkedIn.

You can also download the Designed to Disrupt report here.

About Catherine Fitzpatrick

Catherine Fitzpatrick is the Founder & Director of Flequity Ventures, a social enterprise which aims to empower business to disrupt financial abuse and gender bias through more flexible, safe and equitable product and service design.

[1] https://www.abs.gov.au/statistics/people/crime-and-justice/partner-violence/latest-release

[2] https://www.pmc.gov.au/resources/national-strategy-achieve-gender-equality-discussion-paper/current-state/gendered-violence

[3] https://nnedv.org/content/about-financial-abuse/

The views expressed within the article are solely that of the thought leader(s) featured, and don’t necessarily reflect the views of the association or its members.

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