Trigger warning: This article discusses economic abuse, which some readers may find distressing.
Speaking at a Diversity and Inclusivity Finance Forum (DIFF) event, Claire Towe, co-founder of Meet Margo, said in the UK, one in seven women – equal to 4.2 million people – are impacted by economic abuse.
Looking at joint mortgages specifically, this rises to one in eight women, with the mortgage cited by 78% of women as the reason that they are prevented from leaving their abuser.
“When we talk about economic abuse, it’s not niche, it’s not abstract, it’s here, it’s in this room, and the likelihood is you have advised somebody, or had a conversation with somebody, who’s been going through economic abuse – even if you didn’t know it at the time.
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“Whether you’re a lender or an adviser, if you don’t know what to look out for, then how are we going to support these clients if they’re coming to you faced with economic abuse, if they… maybe don’t realise that it’s economic abuse and people maybe don’t realise that it’s happening to them?” she said.
Economic abuse is where one person might use money, resources and/or property to gain power over another person, and the aim of the perpetrator is to “control the victim’s life financially, emotionally and practically”.
She said economic abuse behaviour centres on three areas: restrict, exploit and sabotage.
On the ‘restrict’ side, this is when the perpetrator limits how a victim can use money or controls their access to resources, whereas ‘exploit’ is when a perpetrator uses a victim’s finances for their own benefit.
Finally, ‘sabotage’ is when the perpetrator undermines the victim’s ability to be financially independent or move on from that relationship.
Towe said examples of behaviour can be deciding when and how money is spent, checking every purchase, asking for receipts, making the victim-survivor ask for money, controlling access to the car or their phone, keeping accounts or passwords secret, putting everything in their own name so that they’ve claimed all the ownership and maxing out credit cards without consent.
“From a mortgage point of view, what we are seeing is perpetrators stopping partners from making decisions about the mortgage, keeping logins secret, and this is pitched around: ‘Don’t worry, I will take [care] of this’.
“Controlling the money needed to actually pay the mortgage is also a big one too,” she added.
More aspects in terms of mortgages and economic abuse include perpetrators stealing money from victims, damaging properties, taking out loans or credit in their name, making them pay all the household costs, draining joint accounts without permission, using money for mortgage payments for other purposes and forcing them to pay all or more than their share of mortgage payments.
On sabotage, examples include stopping victims from working at all or limiting the number of hours they can work, damaging important documents or valuables and blocking access to bank accounts or benefits.
From a mortgage point of view, stopping the sale or repossession of the home so the victim-survivor is stuck in the joint mortgage and making it more challenging for victims to keep up with payments are other examples.
She noted that it was something that her firm saw often, either with people who have just separated or after the relationship is over – that finances, and mortgages in particular, are “weaponised as a tool [of economic abuse]”.
This is partly due to the joint nature of the product in many cases, and it can be “really difficult to financially untangle”.
Economic abuse is ‘double taboo’ meaning conversations are ‘difficult’
Towe said victim-survivors “sometimes don’t even know what is happening to them is a form of abuse”, placing the importance on education.
She said it is common to hear about relationships where one person handles the money and one person doesn’t have as much involvement, and a budgeting culture where control over every penny is “impressive”.
Towe added that there are also different cultural expectations around who controls the finances, which can make it harder to ascertain if someone is being controlled financially.
She noted that looking at work, stepping back from work is also not usually questioned given rising childcare costs and the cost of living, but that this can be a sign of economic abuse, as it is a “rebalance of financial power within a relationship”.
“I think we also tend to think that earning more is seen as having more of a say. We talk about the breadwinner, and that very term reinforces that somebody is more superior than the other person, who’s maybe contributing equally, but in different ways.
“We see it all the time in protection conversations where we’re talking with the couple, and it’s the person at home saying: ‘We need to get protection in place for the other person because they’re out earning’. That’s not the case, they all need to be protected,” she said.
Towe said economic abuse was a “double taboo” as it was talking about money and abuse, so “having these conversations can be very difficult”.
“That’s where we come in as financial advisers, where we’re able to have a window into these finances, so we have a better chance of spotting these things than a friend or a family member,” she added.
‘No consistent industry-wide approach’ to economic abuse
Towe said there was “no consistent industry-wide approach” to economic abuse, and while there were good practices in place, the industry tended to be siloed.
“We need to be sharing great examples of how something’s worked, or how we’ve responded to these things, because it needs to be a shared approach.
“It’s ensuring that from the top down, that everybody is able to recognise and respond and be aware of what economic abuse is, and I think reviewing policies and procedures to include economic abuse,” she added.
When looking at the mortgage specifically, one example Towe had come across that can perpetuate economic abuse is needing consent from all named borrowers “to do anything with that product, whether it’s moving on, whether refinancing or changing terms”.
“This means that if there’s one party that’s not cooperating or being the perpetrator, it can be very difficult to unpick all of that. We’re seeing this time and time again with the women that we help, and lenders can’t really see between the lines on that.
“I also think, from a coercion point of view, it’s very difficult to evidence that, because when payments are being made, they can look stable, even though you’re not seeing who’s making the payment or who’s being forced to make that payment. You’re not getting that detail,” she added.
Towe said “behavioural patterns” such as the “refusal to pay, refusing to cooperate, and maybe non-engagement completely, that’s all being missed at the minute”.
She noted that “rigid affordability models” can also put victims of economic abuse at a disadvantage.
“In our experience, what we’re finding is we have to escalate. We have to pull in favours… to try and get these cases over the line. It shouldn’t be that way,” she added.
Towe noted that there can be “limited options”, with people often having to go down the specialist lender route.
“We’ve literally been at the point where if we can’t get a ‘yes’ on this, the only option is to go to specialist. I’m not saying specialist lenders don’t have their place, they absolutely do, but the thing is when you’ve got a victim-survivor who’s already financially under strain, paying that higher rate and higher payments, it’s really going to make things worse. We have to look at this from a more mainstream point of view as well,” she said.
Towe said there was a lack of awareness with brokers, and many may not have the tools to be able to respond. She said she wanted to engage with networks and bigger broker firms to offer training and upskilling in this area.
“Clients are coming to brokers because they want that empathetic, personalised support. They don’t want to be just another customer, and I think that’s really important when it comes to a client. Moving to another lender, and when there are arrears involved, the broker might be lost in the equation there, and it’s hard for us to get looped back in even if the client needs us to.
“I think the outcomes of these victim-survivors very much depends on your broker and on the broker’s experience. It very much depends on how willing somebody is to challenge or keep going with the case, or maybe not even engage with a client at all, because they are not as sure as to how they can assist them. I think that difference can completely change a victim-survivor’s life,” she noted.
Best practice for economic abuse cases
Towe said it was important to involve management by escalating internally to a line manager or designated safeguarding lead, and for those that work alone, escalate to their network.
She added that it was important to consider the wider risk with safeguarding, so if there are children involved or if there is a risk of physical harm.
Towe noted that it was also important to check in with teams, as cases like this can take an emotional toll.
“Survivors are more likely to open up to somebody in financial services than they are to the likes of the police or another support service, so whether we realise it or not, we have… a huge role to play, and we’re often the first people that they turn to.
“I think the more we talk about economic abuse and the more we challenge it, the less people will be impacted by [it], so I think together, let’s make sure no customer is ever locked out [of] or into… their mortgage,” she said.
Towe added that the Surviving Economic Abuse (SEA) charity also had resources that advisers could use.
