Banks need to help protect women from financial abuse - report

Report calls for simple changes to banking products

Banks need to help protect women from financial abuse - report


By Jayden Fennell

A new report is calling for banks to disrupt domestic violence in Australia by redesigning products to prevent financial abuse.

The Centre for Women’s Economic Safety (CWES) report, titled Designed to Disrupt,  identifies the banking products  that are commonly implicated in financial abuse are joint products such as transaction accounts, credit cards, personal loans and mortgages.

The report findings outline specific changes that are needed to counter the ways products are weaponised – for example, setting up every joint account with separate passwords, logins and portals for each person so it is simpler and safer to separate if the relationship was to end or was to end in an abusive manner.

Rebecca Glenn (pictured above left), CEO of the CWES said the report made a series of recommendations for banks to make it harder for perpetrators to use financial abuse as a tactic of coercive control.

“Currently, banking products are designed in a way that assumes all relationships are healthy and equal,” Glenn said. “But the reality is that financial abuse is rife in Australia and there’s more banks can do to protect victim-survivors. Banking products can and should be redesigned so that couples who set up joint accounts have protections in place from the very beginning.”

Glenn said the report called for all Australian banks to make simple but transformational changes to their products – starting with changing terms and conditions to make it clear that a bank account was no place for abuse and supporting women when it came to their financial choices.

“Women are more than twice as likely as men to experience financial abuse and they do so within existing structural economic inequality,” she said.

“Financial coercion can stop women from leaving their abusive partner, it strips them of their financial autonomy and can wreck their credit score and leave them mired in debt. To victim-survivors of financial abuse, know that you are not alone. The system can be very unhelpful and difficult to navigate and there are resources available.”

Report author and former bank executive Catherine Fitzpatrick said few businesses were better placed than banks to protect women against financial abuse and family violence, which often resulted in devastating health and economic impacts for women and their children.

“I’ve seen first-hand the progress Australian banks have made to improve support for customers who disclose domestic and family violence,” Fitzpatrick said. “Their focus has rightly been on the safety of victim-survivors and addressing the harm of financial abuse after it’s occurred. Now it’s time to send a clear signal to perpetrators that abusive behaviour is unacceptable.”

Fitzpatrick said banks had taken the first steps which were modelled on the eSafety Commissioner’s Safety by Design, with new data showing more than 90% of customers stopped sending abuse through payment descriptions following a warning letter from their bank.

“Since 2020, more than 500,000 abusive transactions have been intercepted in real time and 3,000 customers have been issued a warning letter, had their online banking suspended or were exited from the bank,” she said.

“That’s a powerful example of how banks can play their part in ending gendered violence within a generation and I’d urge them to keep going and introduce Financial Safety by Design for a wider range of products.”

Federal Minister for Social Services Amanda Rishworth (pictured above centre) said financial coercion and abuse was one of the many barriers women and children who were leaving a violent partner would face.

“This is why it is so important that financial institutions look at how their products and services could be improved to help meet the goal of ending gender-based violence within a generation,” Rishworth said.

“Women should not have to choose between their financial security or their safety. I welcome the findings of this report and thank Rebecca Glenn and Catherine Fitzpatrick for their important work. I hope that along with the National Plan to End Violence against Women and Children 2022-2032, this report will assist in achieving our goal to reduce and ultimately end violence against women and children.”

Financial Counselling Australia CEO Fiona Guthrie (pictured above right) said financial counsellors have seen the devastating toll of financial abuse among their clients and recognised the role banks could play in preventing that abuse.

“It’s essential that banks have safeguards in place to protect people against economic abuse and the crippling impact it has on their health and wellbeing and that of their children,” Guthrie said.

“This report highlights the practical steps that banks have taken to reduce financial abuse, but there is still much more than can be done. Embedding safety by design would be ground-breaking and banking products should not be used as weapons to harm people. The key opportunities to do that are with joint accounts and lending products and this report shows just how that can be done.” 

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