Economic abuse is on the rise. Lynda Moore offers some guidance, strategies and links to where you can get help

Money does have a dark side, and as easy as it is to ignore it, I thought I would put the spotlight on it and delve into the world of economic (or financial) abuse.

It’s with a heavy heart that I say that this type of abuse is on the rise. Not just for the elderly, but in relationships as well. It can take many different forms and for those on the receiving end it can be confusing, terrifying and very damaging not only financially but to your mental health as well.

For the older generation, financial abuse is the improper use of their money and assets, often by someone they know and trust. Most often it’s carers or family members. 

Notice I said older, not just elderly, as there is no particular age for the abuse to start. It might be a young adult using emotional blackmail to get money from parents, or older relatives to support their lifestyle and habits (usually not the good ones). The ‘You’ll never see me (or your grandchildren) again, if you don’t give me money’ or, even harder for a parent to hear,  “I’ll end my life if you don’t continue to help me with money’  - this from a younger family member with mental health issues. This puts major financial pressure on families at a lot earlier stage of life, often well before retirement age.

If the elderly person has all their faculties and is able to make financial decisions and has had appropriate advice, then it is perfectly fine for them to do what they want with their assets. This isn’t abuse. 

This is the situation that mum and I were in when we decided to pool our assets and invest in a property together.  Mum is very capable of making decisions, even so, we went through a very rigorous process of legal advice and documentation to ensure that mum understood what we were doing, the process and what happened to her assets if anything happened to me.  At times I almost felt that I was being accused of financial abuse, it was quite confronting.

We tend to think of financial abuse of the elderly happening to a frail person who might have early-stage dementia, being coerced into handing over cash or other valuables to a family member or carer. This is probably the most common abuse and the one that hits the media.

What are some of the signs to look out for? Here are just a few.

- Money and valuables disappearing after a visitor leaves.

- A drop in standard of living and not having enough money for basics like food and heating.

- Becoming isolated and reliant on one person, who seems to be controlling their life.

- Wanting to change their will or put in place power of attorney’s that favours a particular person above others without discussing it with anyone.

- Transfers from their bank account to another person’s account on a regular basis for no apparent reason

- Bills not being paid.

If you are concerned about a family member or friend you can reach out to Age Concern, or the Elder Abuse Response Service, and they will be able to give you some help on what to do and who to approach next.

Financial abuse within a relationship

There is also another, just as dark, type of financial abuse. This is financial abuse within a relationship.  According to research last year by The University of Auckland about 15% of women who have been in a relationship will have been economically abused. I’m certainly not saying that it doesn’t happen to men as well. It does.

We all understand physical abuse, there are bruises and physical pain. In the case of financial abuse, it is more subliminal, and the victims themselves struggle to realise that they are being abused.

While emotional and financial abuse can be much harder to spot, it is just as, if not more, damaging than physical abuse. Why? Rebuilding your life emotionally and financially can take substantially longer to repair than other forms of abuse. Let's be clear here, any sort of abuse in not acceptable.

Typically, we don’t communicate well when it comes to money. Even within relationships money can be a taboo subject. This is particularly the case in the early stages of a relationship when love is blooming and common sense and logic takes the back seat. You don’t see what could potentially end up as financial abuse as it is often very carefully concealed in supposedly loving and caring behaviours.

How do you spot it?

In the early days of your relationship, watch behaviours. Who pays when you go out? What happens if you change the pattern and offer to split the bill for example?

How do you feel when you observe your partner’s money behaviours? Listen to your gut. Does it give a lurch every time the credit card comes out, or do you feel calm?

How does your partner react to your money behaviours? Again, listen to your gut and step back and observe.  Do you feel comfortable with their responses to you?

Does the question of merging your finances come up quite early in the relationship? If the thought of combining doesn’t feel comfortable to you, then there could be warning signs there.

I know it is hard to watch for this when you are in the first flush of love. I’m not saying that you should leave a relationship because you feel a little uncomfortable. The discomfort you feel is the starting point for a conversation, the outcome of that conversation will determine what you do next.

If you missed the signs early on in your relationship, then things may have escalated to -

- Controlling your personal money, wanting access to your bank accounts, or not allowing you to have your salary or wages paid into your personal bank account.

- Controlling shared assets, making decisions without your input, spending whatever they want from joint funds, but criticizing you for wanting to do the same. Controlling the purse strings, you need to ask for money as you don’t have access to bank accounts or credit cards.

- Becoming enraged over money, this can then lead to physical abuse as well.

- If you do manage to leave, refusing to pay child support and dragging out the financial aspects of the separation as long as possible to try to destroy you financially.

If you are concerned about financial abuse in your relationship, there are organisations that can offer advice, for example Women’s Refuge, or your local community support groups. If you are concerned about someone else, then ask if they need help.

Money can just as easily be used wisely and for good purposes. It’s sad to see that there seems to be an increasing number of people who are quite willing to exploit others for their own gain.

If you have any concerns at all about any type of economic abuse, please reach out to the organisations I have mentioned, or a trusted friend who can help you take the next steps.

*Lynda Moore is a Money Mentalist coach and New Zealand’s only certified New Money Story® mentor. Lynda helps you understand why you do the things you do with your money, when we all know we should spend less than we earn. You can contact her here.