Australia’s consumer credit industry this week released its first set of guidelines on domestic abuse and credit reporting. Brokers whose clients carry financial abuse credit report damage now have an industry-wide framework to draw on.
The Principles of Best Practice: Domestic Abuse and Credit set out how credit providers and reporting bodies should handle records damaged by financial abuse.
Peak body Arca, the Australian Retail Credit Association, developed the guidance. It consulted regulators, community organisations, and specialist stakeholders throughout the process.
Financial abuse can leave a client’s credit file carrying entries they had no part in, creating:
Those entries can block access to a home loan for years after a client has left an unsafe relationship.
Until now, how lenders and credit reporting bodies handled correction requests varied across the industry. The new principles establish a consistent process across five areas:
Arca chief executive Elsa Markula (pictured) said credit files too often continued to reflect a former partner’s control long after a relationship had ended.
‘Domestic abuse thrives on control,’ Markula said. ‘For too many victim-survivors, that control doesn’t end when they leave. It continues to show up in their credit report – in payments they can’t afford, credit entries they know nothing about, and loans they never wanted.’
A person’s credit report should reflect their true creditworthiness, not the impacts of abuse, Markula said.
According to the Australian Bureau of Statistics’ 2023 Personal Safety Survey, one in four women and one in 14 men have experienced intimate partner violence.
Financial abuse is among the most common forms of domestic abuse. Its consequences often persist long after a relationship ends, including:
Catherine Fitzpatrick, chief executive and founder of Flequity Ventures, said the guidance tackled a persistent gap.
Flequity Ventures worked with the Independent Collective of Survivors, the Centre for Women’s Economic Safety, and the Institute of Non-Violence to inform the principles.
‘For too long, credit reports have carried the scars of financial abuse,’ Fitzpatrick said. ‘Consistent adoption across industry would be a significant step towards ensuring financial abuse does not remain a lifelong financial penalty.’
Julia Davis, principal of external relations and advocacy at the Financial Rights Legal Centre, welcomed the release.
‘Along with other consumer advocates, we have called on the industry for many years to have clear and consistent approaches to supporting victims of financial abuse with credit reporting corrections,’ Davis said.
‘These principles will help ensure fraudulent or coerced debts do not define a victim-survivor’s creditworthiness.’
This release builds on a series of related changes:
Brokers with clients affected by family violence now have a clearer referral pathway. They can direct those clients to their credit provider to request a correction, using the ASIC guidance on family violence and credit reporting as context.
