The Hidden Face of Financial Abuse

Every time Lori bought groceries with a check, she would write it for an extra $5 to $10 and pocket the difference. At home, when no one was watching, she would stash the money inside tampon applicators in her bathroom where she hoped her abusive husband would never look. Each time she collected $100, she took those bills to a bank in the next town and exchanged it for $100 bill so the money would be easier to hide. After two years, she saved the $2,600 needed to hire an attorney and file for divorce.

“That was the longest two years of my life,” says Lori. “I lived in fear that he would kill me.”

Her instincts were right. After Lori filed for a divorce, her husband showed up at their shared home with a gun and plans to kill her, their six children, and then himself. Lori and the children weren’t home and, because of his actions, Lori was able to get an emergency personal protection order keeping her soon-to-be ex-husband away from her, her children, and their home.

That was almost 13 years ago. After leaving her husband, Lori worked two jobs, as a secretary and waitress, and eventually went back to school, earning a master’s degree in social work from the University of Michigan.

Lori, now 51, was a victim of financial abuse. She had no access to her family’s bank account or credit cards, her husband forbid her to work outside the home, and when she wanted to spend money, she needed to ask his permission. Lori tried to leave him several times, but she always went back because she couldn’t provide for herself and her six children independently.

Her story isn’t unusual. One in four U.S. women will experience domestic violence in her lifetime, according to the Center for Disease Control, and 99 percent of those victims will also experience financial abuse, according to the Center for Financial Security.

“Many people don’t recognize financial abuse right away, in part, because of historic gender roles,” says Sarah Gonzalez Bocinski, director of the Institute for Women’s Policy Research’s Economic Security for Survivors Project.

According to Bocinski, there are relatively clear ways to identify victims of abuse.

“These are very planned, deliberate acts that abusers do to limit victims and prevent them from breaking free,” says Bocinski.

One of the most common ways abusers control their victims is to build up debt in their name, without telling them, she says, because once you have large amounts of debt in your name or a low credit score, it can be difficult to rent an apartment and, in some cases, even get a job.

The ramifications of excessive debt and a low credit score can last longer than the effects of physical violence, says Dr. Judy Postmus, associate professor director of the Center on Violence Against Women and Children at Rutgers University. If your spouse knows your social security number and your mother’s maiden name, they can easily open up credit cards, a line of credit, or even a business in your name without you knowing about it.

“If someone is racking up debt in your name, when you get a divorce that debt is split 50-50,” she says. This is true even if you don’t know about the debt.

Leaving an abusive relationship is a real challenge for victims of financial abuse, says Katie Ray-Jones, CEO of the National Domestic Violence Hotline. When a woman reports financial abuse, it’s difficult to get the police involved, she says. There is no way for the victim to prove she didn’t open that credit card, or that isn’t her signature, or that her spouse wiped out the bank account.

And, because there aren’t any laws that focus on preventing financial abuse of an intimate partner, the topic hasn’t gained the attention of researchers, says Postmus. Most of what is known about financial abuse comes from survivor’s stories, not from large-scale national research, she adds.

Ray-Jones adds that many abuse victims report that their partners feel threatened and become more abusive when the victim begins to earn more money or gets promoted at work. In fact, victims have told her about opening a separate bank account when they get a raise and asking their employer to divert that money to a secret account. Victims have also asked their boss not to give them a raise. But there is no national research to show how widespread these tactics are or whether the violence increases as the victim gains more economic independence.

Several studies offer anecdotal evidence that abuse may increase as victims try to improve their economic status or employment prospects. For instance, a June 2016 study by Partners for a Competitive Workforce finds that intimidation and intimate partner violence can discourage enrollment and participation in education and training programs. Similarly, a National Resource Center on Domestic Violence study found that domestic violence typically escalates when a survivor enrolls in education or training.

However, Postmus says another theory is the abuse may decrease as the victim’s income goes up because the partner doesn’t want to lose the extra income. “The problem is we just don’t know,” she says.

“We often hear from women that finances are a way for partners to control, manipulate, coerce, and intimidate them,” says Ray-Jones. “A lot of women don’t leave the relationship because they fear being able to financially take care of their children.”

Both Postmus and Ray-Jones credit The Allstate Foundation, the philanthropic arm of Allstate Insurance Company, with bringing awareness to financial abuse 10 years ago with its Purple Purse program, aimed at helping financial abuse and domestic violence victims. A cornerstone of the program is an online financial curriculum, Moving Ahead Through Financial Management, which was developed specifically to help financial abuse victims leave their abusers, get out of debt, and restore their credit rating. To date, about 800,000 people have completed the course, which is available in English and Spanish.

In 2014, Allstate asked Rutgers University to conduct a study of 457 survivors who had completed the curriculum to validate the program was helping survivors, says Vicky Dinges, Allstate senior vice president of corporate relations. After completing the course, 90 percent learned to create a budget and 72 percent understood how to improve their credit rating, compared to 20 percent precurriculum. There was also an 18 percent increase in the number of survivors using a bank account after completing the course.

“It was important for us to know the curriculum was valuable for survivors,” Dinges says. “We wanted to work on a solution, not just put a Band-Aid on the problem.” The course encourages victims to take small steps towards leaving their abuser:

Postmus and Ray-Jones both agree more needs to be done to study the long-terms effects of financial abuse. For now, Ray-Jones says her organization shares anecdotal evidence with Congress, but that hasn’t been sufficient to get Congress to create laws against the financial abuse of an intimate partner.

Ideally, says Postmus, there should be a law that protects intimate partners from financial abuse. Last year, England changed its domestic violence and abuse law to recognize financial abuse, she says. Abusers in the United States should be held responsible for causing someone to jeopardize their financial status, says Postmus. As of now, one in four women is still a victim of intimate partner violence, which is more than the number of women diagnosed with breast, ovarian, and lung cancer combined.