How you could protect loved ones from financial abuse

While the physical and emotional aspects of domestic abuse are more commonly talked about, financial abuse can also affect your vulnerable friends or family members.

When your loved one has fallen victim to this form of manipulation, the perpetrator will often take control of their money and manage their spending and access to their bank accounts, leaving the victim with limited or no access to cash.

Unfortunately, people seem to be more vulnerable to financial manipulation than ever. According to Aviva, the Financial Conduct Authority (FCA) found that, in May 2022, there was a 15% rise in customers with vulnerabilities, primarily due to low financial resilience and life-changing events caused by the pandemic and the current economic crisis.

Aviva also found that 40% of Brits have suffered from financial or economic abuse at some point in adulthood.

Of those who responded to the survey, the types of abuse they suffered makes for difficult reading:

• 12% felt their purchasing was controlled or were told they weren’t allowed to buy something.
• 9% found their debit or credit card had been used without their knowledge.
• 7.5% felt someone had taken control of their money, such as being given “pocket money” from their own account.
• 7% suspected their credit cards were used to buy something without their permission.
• 6% felt they were forced to buy something in their name that they didn’t want to buy.

Aside from the examples listed above, financial abuse can come in many forms, and it can damage the emotional and financial wellbeing of the victim.

Thankfully, there are ways you can inform and protect your vulnerable loved ones from financial abuse. Continue reading to discover some practical steps that you can take to help your friends or family combat malicious financial manipulation.

Ensure you’re aware of the red flags of financial abuse

Even though financial abuse isn’t always easy to identify, there are several tell-tale signs to look out for that could indicate that financial abuse is occurring. These include:

• Your family member becomes easily irritated, impatient or emotional when they’re usually pleasant to speak with
• An individual is seemingly vague or evasive when it comes to speaking about their finances and refuses to answer any questions you raise
• They express concern or doubt about aspects of their wealth, such as protection, online banking or property matters
• They deliberately isolate themselves from their family and friends
• There are numerous unpaid bills, even though someone is supposed to be handling payments for them
• The signatures on financial documents don’t resemble previous ones
• Sudden changes are made to a will
• Assets, such as material items, are suddenly transferred without explanation to another family member or someone outside the family.

Of course, a sudden change in a loved one’s behaviour doesn’t automatically mean they’re experiencing financial abuse. It may, however, be a sign that you should broach the topic with them to try and find out what’s going on behind closed doors.

Ensuring your vulnerable family member is aware of the warning signs of financial abuse is perhaps one of the best ways to help them recognise that they’re a victim.

When they know the signs, they could be more likely to shake off the denial that, unfortunately, often comes with this type of manipulation.

Suppose your vulnerable loved one feels they’re falling victim to financial abuse and tells you about it. In that case, they could contact an expert at Safe Lives or Surviving Economic Abuse, or call The Domestic Abuse helpline on 0800 2000 247.

The perpetrator may also be prosecuted, as controlling and coercive behaviour – including financial manipulation – officially became illegal in the UK in 2015.

There are other steps you can take to protect loved ones too.

Help them manage their budget

Another brilliant way to protect your vulnerable family member is by helping them manage their budget.

You should ensure that they’re frequently checking the balance of their current accounts and reviewing the paperwork for any pensions, investment accounts, properties, or protection.

They can then accurately track their household income and outgoings and flag any unusual payments or suspicious activity.

When your vulnerable family member knows exactly how much money is entering and leaving their account, they can quickly identify abusive behaviour and take steps to rectify the problem.

Maintain regular contact with them

You should ideally schedule regular calls or visits with the family member you believe may be at risk of financial abuse.

Simply speaking with someone about financial manipulation can help; thankfully, many victims have seemingly done this.

In fact, 76% of people who responded to the survey reported by Aviva said they’d talked to someone about their abuse. Those they spoke to included:

• 25% to their friends and family
• 23% to their bank
• 13% to the police or any other professional body
• 13% to victim support.

When you’re regularly in touch with someone you’re worried about, you’re more likely to spot the signs of financial abuse and can help them navigate the situation. Or, if your loved one maintains regular contact with the police or victim support, they may be able to benefit from further advice.

Name a Lasting Power of Attorney

If you’re worried that a loved one is being financially abused, you can appoint a trusted person to act as their attorney. This legal arrangement is called a “Lasting Power of Attorney” (LPA).

This attorney doesn’t need to be a legal professional – it can be someone trustworthy and financially literate who won’t take advantage of your family member when they’re at their most vulnerable.

With a property and financial affairs LPA monitoring your loved one’s finances, they can keep an eye out for any unusual payments or withdrawals of large sums of money that may indicate financial abuse is occurring.

Have them write a will or update an existing one

A will is a way for your family member to outline their wishes about how they’d like their assets to be passed on after death. With an up-to-date will in place, your loved one can reduce the risk of falling victim to financial abuse, as it gives them a chance to set out the terms for their estate.

It’s worth remembering that while a will is a fantastic way to limit the effects of financial abuse, a sudden and unexpected change to an existing will may be a sign of financially manipulative behaviour.

Introduce them to your financial planner

Above all else, you could introduce your loved one to your financial planner. This is perhaps one of the simplest and most effective ways to manage financial vulnerabilities.

A financial planner can help your family member by:

• Creating a financial plan that helps them meet their needs and goals
• Protecting their wealth against particular risks, such as sudden loss of income or becoming mentally or physically incapacitated
• Managing any additional income they receive, such as a personal health budget
• Giving them more confidence to invest and save their money tax-efficiently.

Working with a planner and becoming financially literate is empowering and one of the best ways to ensure your loved one can identify and fight against financial abuse.

Get in touch

If you’re concerned that a loved one is the victim of financial abuse, it’s essential to act.

Experts at Safe Lives and Surviving Economic Abuse are available to help or, if you are a victim, or know of someone who needs help, call The Domestic Abuse Helpline on 0808 2000 247.

For more information, please get in touch with us today.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The Financial Conduct Authority does not regulate estate planning, tax planning or will writing.

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