- Having loans or contracts taken out in someone else’s name considered the worst form of financial abuse.
- 52% do not believe financial institutions do enough to protect customers from financial abuse.
Some people will always seek to exploit others, and when those individuals are trusted friends or family members, it’s even more troubling. Recently, there has been a rise in cases of financial or economic abuse, which, in many respects, can be just as damaging as emotional or physical abuse. Victims often find themselves with little or no access to their own finances, leaving them vulnerable and powerless. This type of abuse typically involves the perpetrator controlling the victim’s money, spending, bank accounts, and ability to borrow. Disturbingly, the abuser is often a spouse or family member, meaning the people who should be trustworthy are the very ones inflicting harm.
Examples of financial abuse include someone using a credit card to pay for items without the cardholder’s knowledge or having contracts taken out in their name for the perpetrator to use (such as mobile phones, credit cards, mortgages, and loans). Some even make their victims change the beneficiary of their will. CardRates recently carried out a survey of 3,000 Americans to find out how many people have been victims of financial abuse.
The study found that 51% of Arizonans said they have been victims of some form of financial or economic abuse – this compares to a national average of 43%. The top five states to be affected by financial abuse are:
1. Tennessee: 71%
2. Mississippi: 60%
3. Wyoming: 60%
4. Alabama: 59%
5. Colorado: 58%
Infographic showing the number of victims of financial abuse in each state
CardRates also surveyed participants to gauge their thoughts on financial abuse. When asked “What do you consider the worst form of financial abuse?” The top response, chosen by 47% of respondents, was having loans or contracts taken out in their name without consent – a violation that leaves victims powerless while someone else benefits from their identity.
Close behind, with 25% of respondents, was unauthorized credit card use, a concern that has grown with the ease of contactless payments, which makes fraud more accessible than ever. Additionally, 18% of those surveyed identified being denied access to their own bank accounts or money as the most serious abuse. Another 10% cited being forced to surrender income or savings, likely under coercion or duress, as the most serious abuse.
CardRates also asked participants how being a victim of financial abuse had affected their financial situation. Forty-six percent said it had damaged their credit score, which needs to be spotless if you want to take out a big loan, such as a mortgage. Another 30% of respondents said it made it more difficult for them to access money for essentials, and 24% said it left them in significant debt.
Over half (52%) said they did not believe that financial institutions do enough to protect customers from financial abuse, while only a quarter (26%) of respondents said they understand their legal rights in relation to financial abuse.
Another 65% of people think that financial abuse is either addressed poorly or not at all, in comparison to other forms of abuse. The biggest barrier for someone reporting this crime is not knowing where or how to report it (31%). Twenty-three percent said a lack of evidence would prevent them from doing so, while 17% said they believed that nothing would be done even if they did, and 12% cited a fear of retaliation; after all, the perpetrator knows exactly where they live.
“If you suspect that someone you know is financially abusive, contact a lawyer or seek professional advice straight away,” says Jon McDonald, senior editor at CardRates.com. “Financial abuse is often something that often occurs over years, and won’t stop on its own.”
