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DFV and Debt – Needs more than financial hardship response

Some businesses are providing sophisticated responses to customers experiencing domestic and family violence (DFV), but some are too quick to focus solely on financial circumstances rather than the impact of abuse. 

A range of reforms over the past 4 years (by businesses, Government, and regulators) have led to better financial outcomes for some victim survivors who are better able to re-establish their lives as a result.

The link between business processes and DFV is better understood, including the misuse of online services for abuse, access to online accounts, and use of customer data by perpetrators to locate or abuse a victim survivor.  However, financial counsellors and community lawyers say that when it comes to debt issues, some businesses are too quick to apply their processes for financial hardship, without considering the impact of DFV.

Specialist family violence financial counsellor, Linda Wright, says Debt is a key weapon for abusers, and often the main barrier to a victim survivor’s recovery.”  The more responsive businesses consider the impact of the abuse on how the debt was incurred, or not paid, as well as any financial hardship – but being in financial hardship shouldn’t be a pre-requisite for the business to respond.

Linda says that her clients have good experiences with businesses.  “For example, one bank cancelled a credit card debt once they understood there was coercion by the perpetrator to apply for the card, and it hadn’t been used for the benefit of my client.  An energy business also cancelled a debt which was in my client’s name but was incurred after she fled the violent relationship.  In these cases, my clients’ financial circumstances weren’t relevant to the DFV situation, and the businesses understood that.”

Dacia Abela, economic abuse lawyer at WEstjustice, says where a person has experienced DFV (which usually includes economic abuse) businesses shouldn’t insist on financial statements, but should consider a number of factors in determining an appropriate response including:

  • Was the liability incurred as a result of DFV? For example, was their coercion, or was the victim survivor unaware payments were not being made?
  • Did the creditor’s conduct or processes contribute in any way? (regardless of whether the creditor was in strict compliance with the law)
  • Are there compassionate grounds for restoring the victim-survivor to the position they would have been in without the abusive behaviour, even if the customer isn’t experiencing severe financial hardship?
By |2021-11-16T00:44:42+00:00November 15th, 2021|Latest News, Uncategorized|0 Comments

New funding ensures EARG’s work can continue

The Economic Abuse Reference Group (EARG) will continue to contribute to better financial outcomes for people experiencing domestic and family violence (DFV), thanks to a grant from the Ecstra Foundation. 

EARG is a network of community organisations (financial counselling services, family violence services, community legal centres and women’s services) which work together to influence government and industry responses to the financial impacts of domestic and family violence.

The multi-year  funding commitment provides for a DFV expert to build on the policy work to date, to facilitate information and resource sharing and to co-ordinate input to law reform, reviews and industry policies.

Over the past five years, EARG has provided expert input to law reforms (such as tenancy laws, infringements laws and regulation of utilities in Victoria) and industry regulation and guidance (such as industry codes for insurance and banking).

These reforms demonstrate that a wide range of businesses and government bodies can have a positive impact on people experiencing economic abuse and other forms of family violence; and can help reduce the risks of further abuse.

There is much more to be done, including helping other states replicate the Victorian Government reforms .  The EARG will provide guidance and feedback to the many corporate, finance, charitable and government organisations that are actively engaging in addressing economic abuse through their work and to other stakeholders that are in the early stages of developing DFV responses (such as credit reporting, toll road companies and local government).

The Ecstra grant will enable EARG to continue its policy reform agenda and to extend the EARG network nationally, including collaborating with the recently formed EARG in NSW (also funded by Ecstra).

Background

EARG was established shortly after the release of report of the Victorian Royal Commission into Family Violence to provide input to the implementation of recommended reforms.  The network has grown from an initial five Victorian organisations, to over 20 organisations across Australia.   Co-ordination of the network was funded by the Victorian Government from 2017 to August 2020.

See EARG’s report, Responding to Financial Abuse Report – 2020, for details of the reforms and the work of EARG.

https://earg.org.au/wp-content/uploads/Responding-to-Financial-Abuse-Report-2020_Digital.pdf

Ecstra is a not for profit organisation committed to building the financial wellbeing of all Australians within a fair financial system. Ecstra works with organisations across government, community, business, education and research as part of the National Financial Capability Strategy.

By |2020-09-30T23:14:23+00:00September 30th, 2020|Latest News|0 Comments

New report shows we are making a difference.

We have seen better financial outcomes for family violence victim survivors over the past three years, due to the work of government, regulators and business.  A new report by Carolyn Bond and Dr. Madeleine Ulbrick examines what has been achieved, and what remains to be done. 

 

In 2016, the Victorian Royal Commission into Family Violence (RCFV)[1] recommended action by government, regulators and business to address economic abuse.   The Chair of the Victorian Essential Services Commission reflected on what many regulators and businesses were likely to had thought at that time “We’re economists.  What do you want me to do about an issue as pervasive and complicated as family violence?”[2]   However, the RCFV led to major changes in thinking and in practice.

The “Responding to Financial Abuse – Full Report 2019”[3] (Report) is written on behalf of the Economic Abuse Reference Group (EARG). The EARG is made up of 20 community organisations who work collectively to influence industry and government responses to reduce the financial impact of family violence.

Family violence victim survivors suffer financially from the impact of physical violence and economic abuse.  Physical violence can lead to additional health costs, being unable to work, destruction of property, or costs to escape and become re-established. Economic abuse, which is a form of family violence, includes coercion to sign for debts, denying access to household funds and refusing to pay for household bills.  Physical and economic abuse are closely linked, as “denial of material security [corresponds] with denial of physical security”.[4]

The Report focusses on the response by industry and government to the 15 RCFV recommendations[5] that address financial security and economic abuse aimed at:

  • Enhancing the ability of community organisations to prevent and respond to financial stress;
  • Changing business processes to reduce the financial impact of family violence on customers; and
  • Changing infringement and tenancy laws.

In response to these recommendations, the Victorian Government funded family violence training for all financial counsellors, appointed 21 specialist family violence financial counsellor positions, and funded the Economic Abuse Reference Group to co-ordinate community input to government and business reforms.

Financial counsellors have extensive knowledge of a range of areas of law and policy, including consumer credit law, debt enforcement practices, the bankruptcy regime, industry hardship policies and government concession frameworks. The family violence financial counsellors have close links to family violence services and can support clients to take advantage of the relevant laws and business processes.   They also influence laws and policies through broader system advocacy informed by their casework.

Since 2017, financial counsellors have reported better responses from financial institutions, increased understanding of family violence by businesses, release from payment of some fines and debts and, in some cases, tailored responses to complex situations experienced by their clients.  For many clients, these responses have improved their personal safety and allowed them to re-establish their lives.

The Report describes how many larger industry organisations across banking, insurance, utilities and telecommunications, have demonstrated leadership with commitment to dedicated policies and often dedicated staff.

Reforms include family violence guidance published by the Australian Bankers Association and the Insurance Council of Australia, obligations for Victorian energy and water businesses to have effective family violence processes for customers, and a process for seeking release from fines that are incurred as a result of family violence.

More remains to be done, however.  While many large businesses have established effective teams to respond to these customers, there is a need for broader staff awareness to ensure that customers who don’t have an advocate receive a similar response to those who do.   For example, some large debt collection firms have someone who can resolve cases when contacted by an advocate such as a financial counsellor, but when an unrepresented person contacts the call centre, the response does not result in a resolution.

The Report outlines issues requiring further attention including local government’s response to rates, car registration transfer, and credit reporting. There is also a need for other states to catch up with Victoria by resourcing specialist family violence financial counsellors, and reforming tenancy, fines, energy and water laws.

Circumstances related to the COVID-19 pandemic are likely to lead to an increase in family violence and increase the risks of economic abuse[6], as well as problems in accessing assistance services.

Community services will play a vital role in identifying, and responding to, new economic abuse risks.   At the same time, the community sector and industry must ensure we don’t ‘drop the ball’ on our ongoing work to reduce the financial harm experienced by family violence victim survivors.

 

Carolyn Bond is project manager of the Economic Abuse Reference Group

Dr. Madeleine Ulbrick recently completed a PhD thesis ‘A Man’s Home is His Castle. And Mine is a Cage’: A Feminist Political Economy Analysis of Economic Abuse in Victoria.

 

[1] Victoria, Royal Commission into Family Violence, Summary and Recommendations (2016), p1.

[2] Dr Ron Ben-David: What can an economic regulator do about family violence? , Speech delivered at family violence resources review forum, Melbourne, 30 August 2018 (Essential Services Commission, 2018).

[3] Carolyn Bond and Dr Madeleine Ulbrick, Responding to Financial Abuse Full Report (Economic Abuse Reference Group 2019).

[4] Dr Madeleine Ulbrick, ‘A Man’s Home is His Castle. And Mine is a Cage’: A Feminist Political Economy Analysis of Economic Abuse in Victoria, Doctoral Thesis (Monash University 2019).

[5]   Victoria, Royal Commission into Family Violence, Final Report Vol IV, P119.

[6] Family Violence, Economic Abuse and COVID-19 (Economic Abuse Reference Group 2019)

By |2020-09-28T06:43:20+00:00April 14th, 2020|Latest News|0 Comments

Family violence, financial abuse and COVID-19

Domestic and family violence increases in times of disaster[1], and services are already reporting an increase in calls for help[2] as a result of COVID-19. Contributing risks include isolation with a violent partner and being cut-off from community supports.

Other factors specifically increase the risks of financial abuse. Financial abuse (also referred to as economic abuse) is a form of family violence which commonly accompanies physical and emotional abuse.

The ability to access superannuation opens up an avenue for an abusive person to coerce, or force, their partner to access their funds when this is not in the person’s best interests.  New rules allow people to draw down up to $20,000 of their superannuation over two years.    This could cost $50,000[3] in retirement income, or about a year’s worth, according to Super Consumers Australia, who suggest this should only be done as a last resort.

According to community services which are members of the Economic Abuse Reference Group, the social security system also presents risks, particularly for women.  The woman is generally liable for debts incurred for certain payments if their partner doesn’t provide accurate income information, and women are too often coerced into making false claims where the funds are used for another person’s benefit.  It is likely that the increase in the numbers of eligible claimants, and the new range of benefits available, will lead to an increase in this form of abuse.

Risks related to family businesses are likely to increase as businesses are under greater stress.  One partner may be coerced into signing documents even though they have little involvement or understanding of the business finances.  After a relationship breaks down, it’s not uncommon for one partner to have responsibilities as a director, or to have large debts, which they have been unaware of.

Financial stress may also see an increase in other forms of financial abuse that we see in our work, for example drawing down on mortgages without the other partner’s knowledge, withholding money for necessary living expenses and coercing the partner to sign loans.

The increase in online (rather than in-person) shopping, and move away from stores accepting cash, may also allow a perpetrator to have tighter control over the other person’s finances.

We have made significant progress in Australia over the last two or three years to improve government and business awareness of economic abuse, and responses to helping those who are experiencing it.

With the focus on responding to the pandemic, it’s important that community, industry and government continue to be alert to the risks of domestic and family violence, including economic abuse.

Banks, energy, water and telecommunications companies have processes to respond to financial hardship, and also now have processes to help customers who are experiencing financial abuse.  People should check their provider’s website, call them and tell them they are experiencing abuse or get help from a free financial counsellor.  There are specialist family violence financial counsellors in Victoria and some other states.

If you, or someone you know, is experiencing financial abuse, call 1800 RESPECT or they can contact free financial counselling by calling 1800 007 007.

 

Carolyn Bond

[1] https://awava.org.au/2020/03/25/blog/self-isolation-means-many-women-will-be-trapped-with-their-abuser?doing_wp_cron=1585181929.6245489120483398437500

[2] https://www.womenssafetynsw.org.au/impact/publication/summary-report-impact-of-covid-19-on-women-and-children-experiencing-domestic-and-family-violence-and-frontline-domestic-and-family-violence-services/

[3] https://www.choice.com.au/money/budget/cost-of-living/articles/coronavirus-support-payments-how-do-they-work

 

 

By |2020-03-30T05:04:33+00:00March 30th, 2020|Latest News|0 Comments

Report on Victorian response to financial abuse

This refers to a 2018 report which covers activity prior to the Victorian Royal Commission into Family Violence until late 2018.  A more recent report, covering the period from the Royal Commission until December 2019 can be found here.

Collaboration between Government, community and business sectors in Victoria have led to significant reforms which improve the economic wellbeing of victim-survivors of family violence.

A new report describes developments over the past 20 years including recognition of economic abuse as a form of family violence and efforts to improve financial outcomes for family violence victim-survivors.

Read the Responding to Financial Abuse Report (2018)

 

By |2020-04-18T09:53:34+00:00December 11th, 2018|Latest News|0 Comments

Auditing the water industry’s family violence response

The Victorian water regulator audits water businesses annually to check compliance with customer services codes.  This year’s audit, the Essential Services Commission (ESC) will focus on the family violence provisions of the code which must be implemented by 30 June 2018. 

The audit will test whether the minimum family violence requirements are addressed in company policies, as well as whether:

·        training has been delivered, and who was trained 

·        family violence included as an eligibility criteria for hardship assistance 

·        call handling processes for customer affected by family violence.

Progress will then be checked next year.

In 2018-19, the ESC is developing a qualitative reporting framework in partnership with the water sector, community groups and family violence specialists. This framework will seek to identify whether staff and customers who experience family violence are benefitting from water business policies and whether outcomes would be improved by further changes.

By |2018-07-03T01:05:32+00:00July 3rd, 2018|Latest News|0 Comments

App helps women gain financial freedom

PENDA is a free app provides financial tips, legal information and referrals for women who have experienced family violence. It has been developed by Womens Legal Service Queensland and the Financial Rights Legal Centre with funding from Financial Literacy Foundation.

By |2018-05-23T15:25:21+00:00April 25th, 2018|Latest News|0 Comments
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