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Perpetrators of financial abuse are being warned they could be cut off from their bank, with a number of major Australian financial institutions updating their terms and conditions to make it clear it will not be tolerated.
NAB has announced a new reference to “unacceptable account conduct” on its savings and transaction accounts that gives its bankers the green light to cut customers off if they are found to be perpetrating financial abuse.
Financial abuse is becoming an increasingly prevalent area of concern.Credit: Getty
Concerns about financial abuse remains one of the top reasons customers get in touch with its customer support team, NAB head of customer vulnerability Michael Chambers confirms.
“Financial abuse can take many forms, including where an individual is denied access to their own funds [or] has their funds misused by another individual. This form of control can occur between couples, family members or relationships where one person is providing care for another,” he says.
“We’re taking a firm stand against financial abuse and we aren’t resting there. We’re working with other banks to help develop a consistent approach across the industry.”
NAB is also stamping out financial abuse sent in abusive messages via payment transfers. Since January 2022 the bank has blocked more than 200,000 abusive transactions, using technology that searches for keywords and phrases.
Commonwealth Bank has launched a social media campaign to educate customers on the signs of financial abuse after updating its terms and conditions on a range of products that aims to prevent financial abuse. Westpac has also updated its account terms and conditions to include reference to abusive transactions.
The tough stance puts customers on notice that the bank can suspend, cancel or deny access to their savings and transactions accounts if the bank identifies them as engaging in financial abuse.
Not having access to a bank account would make it difficult for a perpetrator to hold down a job or receive government payments.
The direct cost of financial abuse to victims is estimated to be $5.7 million, with an additional cost to the broader economy of $5.2 billion, research from CBA reveals, and one in six Australian women has experienced economic abuse by a partner, a recent government survey found.
What is financial abuse?
Financial abuse can take many forms and can happen over an extended period of time. It could mean blocking access to a bank account, giving someone a strict allowance, and not giving someone the freedom to choose what they spend their money on. Leaving a relationship can be very difficult once someone becomes financially trapped.
Financial abuse can also be pressuring to loan money or go guarantor on a loan, and bullying a person to change their will or power of attorney or other legal arrangements.
The Australian Banking Association also defines financial abuse as spending money without permission, forging signatures, coercing someone to sign something, pension-skimming, using someone’s bank account or credit card without their consent, or denying access to their money or bank statements.
The banks’ moves follow recommendations by the Centre for Women’s Economic Safety (CWES) for banks to redesign products to improve financial safety. Research published late last year found that none of the 20 banks in the Australian Banking Association referenced financial abuse in their terms and conditions.
CWES CEO Rebecca Glenn welcomed news that financial institutions are making it harder for perpetrators to use financial abuse as a tactic of coercive control.
“Few other businesses are better placed to protect women against financial abuse and its devastating health and economic impacts for them and their children,” Glenn says.
Glenn says to avoid financial abuse, set up every joint account with separate passwords, logins and portals for each person so it’s simpler and safer to separate if the relationship ends or is abusive.
The Centre for Women’s Economic Safety offers free money clinics for women experiencing financial and economic abuse or who are concerned about their finances in the context of domestic and family violence.
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
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