Women call for action as reports of financial abuse surge

As the nation struggles to address the violence that has led to the murders of dozens of women this year, new details are emerging of how abuse is perpetrated every day through the basic functions of a bank account.

A parliamentary inquiry this week heard chilling evidence of a sharp rise in financial abuse, a form of coercive control. The testimonies showed the need for greater cooperation with the financial services industry on a comprehensive response to domestic and family violence, and the current shortage of both monitoring and preventive measures.

Financial abuse can manifest as offensive and threatening messages in streams of bank transfers, hiding or withholding information about money, raiding a partner’s super benefits, making them liable for joint debts, preventing them from working, as well as “inheritance impatience” or dowry misuse. Much of it is slow and grinding, as the targets are shamed and hounded into a situation of no hope.

“We are caught in the middle of an awakening of what’s really going on in terms of the risk that’s embedded in the current financial suite of products that are available to Australians,” the chair of the Parliamentary Joint Committee on Corporations and Financial Services, Labor Senator Deborah O’Neill, tells The Saturday Paper.

“I think, tellingly, we have not yet had one financial institution able to tell us any of the amounts that they’ve recovered from victims of financial abuse. This has revealed a very, very complex web of money movements that are unobserved, uncritiqued and facilitating financial abuse.”

National Australia Bank was among the major institutions that noted a substantial uptick in calls reporting financial abuse.

“Last year, it was around 60 calls a month. This year, it’s been 200 calls a month,” says federal Labor member for Swan Zaneta Mascarenhas, who proposed this examination of the role of financial institutions. “And the reason why they wanted to have a look at those numbers was because they had seen an increase in the number of women that were dying because of domestic violence.

“Often financial abuse is the first step in the abusive pathway in relationships.

“For me, it was a concern to hear that we had that escalation.”

This was no ordinary parliamentary inquiry, with bank executives instructed to read the stories of victims. It was also a rare political opportunity to display bipartisanship. On Wednesday, Liberal member of parliament and former Morrison minister Alex Hawke told victim-survivor Shenane Hogg, who detailed how she had been beaten into a coma, she was an “incredible person”.

Financial abuse is recognised in Commonwealth law but it is not a criminal offence in most Australian jurisdictions, making it hard to police and pursue the perpetrators. Tasmania has already criminalised it and similar legislation is only just coming into force in New South Wales.

“We’re still talking about an issue that is relatively new in terms of the evidence base and the focus that it’s had,” Rebecca Glenn from the Centre for Women’s Economic Safety told the committee.

The cost of financial abuse in Australia was estimated by Deloitte Access Economics in 2020 to be about $5.7 billion annually to victims and $5.2 billion to the economy, mainly through lost productivity. However, since the activity is hard to detect, it could well cost more.

The Australian Bureau of Statistics Personal Safety Survey, for the 2021/22 financial year, found about one in every six women and one in 13 men had experienced economic abuse by a partner.

Every story is complex. Toni Shrubshall told the committee she had been dragged through the courts and brought to the brink over her former partner’s pre-relationship debt.

“To date, my legal expenses have exceeded more than $170,000 striving to exclude a taxation debt that had been concealed from me throughout our short term six-year de facto relationship,” she wrote.

“The family courts have enabled this and ultimately rewarded him. I am now faced with losing my home and my business.”

Another unnamed woman detailed how she and her four-year-old son were evicted from her home after a court demanded she make mortgage payments directly to her violently abusive former partner. Only then did she discover he had put the house she helped pay for in his name only.

She testified that not only did he not put that money towards the mortgage, he also took out all the equity on the home.

“We ended up living in a sheep shed at the back of someone’s property for a number of weeks until we found a shared house,” the woman wrote. “Currently we all live in one bedroom together in a shared house, my father sleeps in their laundry room. My son still asks why we aren’t going home every time we drive past our street during the school run. I don’t even have a private or safe space to go to cry so that my son doesn’t see me upset and traumatised.”

There’s also the case of Molly Wilkes, which has been taken up by Environment Minister Tanya Plibersek, who has publicly described the serious emotional, physical and financial abuse committed against her own daughter. Plibersek wrote to Attorney-General Mark Dreyfus and the Minister for Women Katy Gallagher about Wilkes’s case.

Wilkes took her life in 2022 after allegedly being hounded for years by her husband. Her mother, Julie Adams, wants superannuation law changed to stop perpetrators profiting from abuse.

In her last weeks, Adams said the isolated 22-year-old endured death threats, suicide encouragement, taunting and pressure from financial abuse. These included, according to Adams, requests that she “ask me for money, wanting to access her inheritance from her grandmother (my mother), confusing messages indicating that he had all their finances in order whilst at the same time taking out a payday loan, and words to the effect of her being a financial liability.

“[The] trustees had no option but to pay out Molly’s superannuation and death benefit to her abuser. This they did in December 2023.”

O’Neill, who in a parliamentary inquiry months earlier drilled into the misconduct and overuse of government consultants, underscored this risk.

“I want to say to people, protect your super,” the NSW senator said.

“We are aware of some gaming now of malign partners who, in the worst circumstances, have driven individuals to despair and take their life by suicide, and the beneficiary of that death then becomes the perpetrator of financial abuse.

“That cannot continue. I will make a change to that reality a dedicated task of my work going forward.”

The Saturday Paper contacted Assistant Treasurer Stephen Jones, who is responsible for superannuation law.

“The government will close a loophole in the superannuation system so that perpetrators cannot hide assets in superannuation to avoid paying compensation to victims and survivors of child sexual abuse,” Jones said in a statement.

“The government will review the findings of the ongoing Parliamentary inquiry and if there are deficiencies in the law, we’ll work to address them.”

Meanwhile, the attorney-general has announced plans for bankruptcy reforms, such as increasing the threshold for involuntary bankruptcies from $10,000 to $20,000, to ensure a “fairer outcome” for debtors. He also flagged the introduction of a Minimal Asset Procedure for people with few or no assets to clear unmanageable debts, and so make a quicker fresh start.

The second stage of family law reform, now out for consultation, seeks to apply a penalty for family and domestic violence in a break-up when it comes to the separation of property assets.

The inquiry also found evidence of “almost ubiquitous” dowry abuse in some cultures.

It heard testimony from Financial Counselling Australia that of 24 newly migrated women attending a financial literacy day in Melbourne, 16 did not know whether they had a bank account or not.

“Finance is often the easiest weapon of abuse,” Peter Gartlan, the group’s co-chief executive, told the committee.

“Our sector has really been quite overwhelmed with the demands with the cost-of-living crisis. These are reasons why we think it needs much more attention.”

The inquiry heard calls for measures to embed safety in banking products, such as making sure lending institutions have conversations with all parties to loans, and treating couples as two independent units.

Financial Counselling Australia proposes offering banking products that anticipate the potential for break-up.

“I do love the fairytale, but it doesn’t always end up that way,” O’Neill told the Westpac representatives at the hearing.

The major banks admit they are struggling under the weight of the problem. They have specialist teams tasked with dealing with financial abuse that are recruiting and growing.

The closure of face-to-face banking has a role.

Westpac general manager customer solutions Lisa Pogonoski agrees the shift in banking services from physical branches to online platforms has facilitated an increase in abuse, but she says that does not mean financial abuse is not being detected.

O’Neill questioned that, saying there are “layers and layers” of barriers including cultural and physical blocks to allowing people, in “all the glory of their despair”, to speak to human beings at banks.

There may be movement soon.

“One thing that we’re looking at in Westpac group at the moment is how better our remote customers can connect with us. So, what’s the connectivity solution to that? And hopefully, we’ll have something on that soon,” Westpac group customer advocate Adrian Ahern told the hearing.

The banks have customer reporting of abuse as well as proactive identification.

AI is being used with human oversight to disrupt abusive messages in transactions, which is leading to thousands of warnings. Westpac found 95 per cent of the abuse stopped at the point of a warning letter, with 172 customers suspended since 2020 and 13 customers having left the bank.

Experiments are under way to work out how else to use the technology.

As for additional measures to be considered, Mascarenhas offers two stand-out and recurrent themes in the financial abuse inquiry.

One is the need to allow banks and other institutions to take further action if they see evidence of clear financial abuse. This would require reforms to the Privacy Act.

“It’s interesting that the Privacy Act has instances where you can have [exemptions] when there is a threat of life, but there aren’t explicit things that talk about financial abuse or domestic violence,” she tells The Saturday Paper.

The other consistent concern, Mascarenhas says, is around the risk of elder abuse.

“There’s been discussion around harmonisation of laws across the country and trying to make it fairer for elderly people that need to allocate power of attorneys,” she says.

“There is this continual theme of inheritance impatience, which I didn’t even know was a thing until this inquiry.”

There are also calls for Commonwealth departments to act more carefully with victim-survivors.

The inquiry heard the Australian Taxation Office did not have a vulnerability framework for best practices to address financial abuse in a “just and fair” way.

This examination of the role financial institutions play in abuse comes in the midst of a cost-of-living crisis and as yet more women and children are lost in Australia’s domestic- and family-abuse epidemic.

In the past week, a man was charged over the deaths of three children including a baby in a house fire in Sydney’s west, where a man also stabbed his partner to death. A woman’s body was dumped in a wheelie bin in Melbourne’s north.

These events, Prime Minister Anthony Albanese said on social media, show Australia has a “long way to go”.

“My government is determined to end this violence. Together we can make this change. We must,” the post said.

It is a message similar to the “society and Australia must do better” statement he made to an End the Violence rally outside Parliament House in April, which was lambasted amid demands for the declaration of a national emergency.

“National emergency funding is for a short period of time. We need systems that are put in place for longevity,” Minister for Social Services Amanda Rishworth told reporters as they asked about the new deaths this week.

Deborah O’Neill told the committee this week she accepted there was an emergency in financial abuse, and the inquiry was seeking remedies for “dark and insidious” behaviour that is a “great stain on our national identity”.

The Albanese government has so far invested a record $3.4 billion to support its commitment to end gender-based violence in a generation, acknowledging that it is a whole of society, multi-jurisdictional problem.

“There is constant work to be done,” said Rishworth, who is the minister leading the 10-year National Plan to End Violence Against Women and Children.

“I just need to be clear this is not a new issue. It’s not a new issue. We have seen too high levels of domestic and family violence for a long time, and we need consistent and persistent work in this area, and we need to respect the voices of victim-survivors and make sure that they’re front and centre.”

The Centre for Women’s Economic Safety is among the voices seeking a new national body or one-stop shop to drive change and help people navigate the world away from their abusers. Having to retell their experiences takes its toll.

“What women tell us about navigating a way out of a relationship with a financially abusive partner and/or family member is complex, it is exhausting, it’s demoralising, it is like a full-time job with no pay and without the satisfaction,” the centre’s chief executive, Rebecca Glenn, told the committee this week.

Another contributor to the inquiry says a more fundamental shift in perspective is needed. Catherine Fitzpatrick, the founder of consultancy Flequity Ventures, suggests applying a “do no harm” lens on all Australian law before parliament.

“There are gender impact assessments that are being undertaken at the moment. There is none that relates specifically to domestic and family violence,” Fitzpatrick says.

Such boundaries are good for banks as well, she says.

“The recommendation around putting financial abuse in your terms and conditions is to say we want a contractual obligation that says ‘we need you to behave with another customer and we won’t tolerate it if you don’t’. So, there are consequences,” Fitzpatrick says.

These calls for greater consequences for perpetrators of financial abuse are growing.

The committee intends to hand its report to parliament by October. In the meantime, O’Neill wants to acknowledge what so many women have endured.

“I want to say to people, we see you,” she says.

“The shame that has silenced people, I think, hopefully we’ve cracked the nut open and the vulnerability of people who are experiencing financial abuse. I want to say to them, it’s not your fault. It’s not your fault.”

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