Chapter 1Introduction and background

Content warning

1.1This report contains material and lived-experience stories of financial abuse and domestic violence which may be distressing or triggering for some individuals.

1.2If you need to speak to someone or would like further information, you can contact these free support and information services:

Lifeline: Ph. 13 11 14

1800Respect: Ph. 1800 737 732

13 Yarn: Ph. 13 92 76

My Blue Sky: Ph. 02 9514 8115

Beyond Blue: Ph. 1300 222 636

MensLine Australia: Ph. 1300 789 978

Blue Knot: Ph. 1300 657 380

Suicide Call Back Service: Ph. 1300 659 467

Thirrili Postvention Response Service: Ph. 1800 805 801

Full Stop Australia: Ph. 1800 943 539

National Debt Helpline: Ph. 1800 007 007

Australian Financial Complaints Authority: Ph. 1800 931 678

Conduct of the inquiry

1.3On 2 April 2024, the Parliamentary Joint Committee on Corporations and Financial Services (the committee) resolved to commence an inquiry into the financial services regulatory framework in relation to financial abuse, in particular:

(a)the prevalence and impact of financial abuse, including:

1. the approaches taken by financial institutions to identify, record and report financial abuse, and any inconsistencies arising therein;
2. the impact of the shift of financial products to online platforms; and
3. any other contributory factors.

(b)the effectiveness of existing legislation, common law, and regulatory arrangements that govern the ability of financial institutions to prevent and respond to financial abuse, including the operation of:

1. the National Consumer Credit Protection Act 2009;
2. the Privacy Act 1988 (Cth);
3. the Australian Securities and Investments Commission Act 2001;
4. the Insurance Contracts Act 1984;
5. legislation and statutory instruments for superannuation; and
6. state and territory laws and regulations.

(c) other potential areas for reform, such as prevention, protection, and proactive systems, including:

1. existing financial product design;
2. emerging financial products;
3. employee training;
4. appropriate responses; and
5. any other appropriate response, for example, mandatory reporting.

(d) steps that might be taken to support financial institutions to better detect and respond to financial abuse;

(e) the role of government agencies in preventing and responding to financial abuse;

(f)the funding and operation of relevant advisory and advocacy bodies; and

(g)any other related matters, including comparative information about arrangements in relevant overseas jurisdictions

1.4Details of the inquiry were made available on the committee’s webpage, and the committee invited organisations, key stakeholders and individuals to participate in the inquiry.

1.5The committee received 146 submissions, which are listed in Appendix 5 of this report. The committee held the following public hearings:

28 June 2024, in Canberra;

8 July 2024, in Melbourne;

9 July 2024, in Adelaide;

10 July 2024, in Perth;

8 August 2024, in Canberra;

9 August 2024, in Wagga Wagga;

15 August 2024, in Canberra;

13 September 2024 in Canberra; and

20 September 2024, in Canberra.

1.6A list of the organisations and individuals who appeared before the committee at these public hearings is available in Appendix 5. The public submissions, additional documents, answers to questions taken on notice and tabled documents received by the committee and Hansard transcripts are available on the committee’s website.[1]

Acknowledgements

1.7The committee thanks all of the organisations and individuals who participated in the inquiry. In particular, the committee wishes to thank the victim-survivors who bravely shared their personal stories, which provided invaluable information to the committee and contributed to the committee’s understanding of the real-world impacts and gaps experienced by victim-survivors of financial abuse in Australia.

1.8The committee also wishes to thank the Research Coordination Unit in the Parliamentary Library for the helpful and comprehensive research provided to assist the committee.

Notes on terminology

1.9While the inquiry was established to consider the financial services regulatory framework in relation to financial abuse, many inquiry participants refer to economic abuse. The terms ‘financial abuse’ and ‘economic abuse’ may be used interchangeably within this report, and the definitions considered by the committee can be found later in this chapter.

Scope of the inquiry

1.10The committee acknowledges the correspondence received from individuals with concerns and personal experiences in relation to banks and the banking system more generally. While the committee acknowledges the significance of these concerns, it recognises that they fall outside the scope of this inquiry.

1.11The issue of financial abuse in the context of this inquiry relates to interpersonal financial abuse, often occurring within family or domestic violence circumstances.

Structure of the report

1.12The report contains four chapters. This chapter includes information on the conduct of the inquiry, acknowledgements and background on the prevalence of financial abuse in Australia, how financial abuse sits with domestic and family violence and previous inquiries and reports.

1.13Chapter 2 – examines current legislation, common law and regulatory arrangements that govern the ability of financial institutions to prevent and respond to financial abuse. This chapter also considers t the role of advocacy bodies in responding to financial abuse.

1.14Chapter 3 – examines how financial providers identify, respond to and prevent financial abuse.

1.15Chapter 4 – examines proposed areas for reform to better support victim-survivors of financial abuse

1.16Chapter 5 – examines the role of government, and how government services can be manipulated by perpetrators to financially abuse victim-survivors.

1.17This report also includes the following appendices:

Appendix 1 – summary table of financial institutions responses to questions seeking further information on processes to identify, respond to and report financial abuse;

Appendix 2 – summary of financial institution response to questions seeking further information on the retention of home ownership amongst customers in hardship programs;

Appendix 3 – recommendations from the Australian Securities and Investments Commission's report on hardship;

Appendix 4 – submissions and additional information; and

Appendix 5 – public hearings and witnesses.

Background

1.18Financial abuse is a form of domestic and family violence that negatively impacts a person financially and undermines their ability to be economically independent. Financial abuse can also isolate the victim-survivor and can make it extremely difficult for victim-survivors to leave abusive relationships.[2]

1.19The definition of financial abuse differs depending on the source. For example, the National Plan to Respond to the Abuse of Older Australians defined financial abuse in the context of elder abuse as:

… the misuse or theft of an older person’s money or assets. It can include but is not limited to, behaviours such as using finances without permission, using a legal document such as an enduring power of attorney for purposes outside what it was originally signed for, withholding care for financial gain, or selling or transferring property against a person’s wishes.[3]

1.20The Australian Financial Complaints Authority (AFCA) defined financial abuse as a form of domestic and family violence:

Financial abuse is sometimes called economic abuse. Financial abuse is a form of domestic and family violence. It often involves someone using money in ways that can hurt you. Financial abuse can also include stopping you from getting a job or forcing you to get loans you don't want.[4]

1.21Comparatively, the Centre for Women’s Economic Safety defined financial abuse as a subset of economic abuse:

Financial abuse is a subset of economic abuse whereby a person exerts control over their partner or family member’s money or finances, threatening their financial security and limiting their potential for self-sufficiency. Where there is financial abuse, there is almost always economic abuse including control of employment, housing, transport and/or other economic resources.[5]

1.22WEstjustice emphasised that there is no one way, shape or form that financial abuse presents, but noted the most common examples observed included:

exploiting a partner’s wages or savings;

restricting someone’s ability to work;

preventing access to joint finances;

controlling all the money and assets;

making someone give up control over assets and income; and

leaving someone with debt and liabilities by:

forcing someone to incur debt in their name by signing them up to a contract when they do not receive any substantial benefit from that loan;

purposely accruing or nominating fines in someone’s name which can also interlink with loss of licence and therefore freedom of movement;

refusing to contribute to joint liabilities like a mortgage or rent where they can and should be;

ruining a person’s credit rating;

damaging or disposing of a person’s property or assets (particularly in rental properties or vehicles); and

coercing someone to claim social security payments.[6]

1.23The Australian Bureau of Statistics (ABS) classify economic abuse into three broad categories: economic restriction behaviours, economic exploitation and economic sabotage behaviours. Examples of these behaviours include:

Source: Australian Bureau of Statistics, Partner Violence, Economic Abuse, November 2023.

1.24The Department of Social Services (DSS) highlighted that Aboriginal and Torres Strait Islander women experience financial abuse in distinct ways. DSS noted that Aboriginal and Torres Strait Islander women:

… may experience financial abuse not only in intimate partner relationships, but in wider family relationships as well. Cultural norms about sharing wealth, caregiving and broader support systems based on reciprocity increase the risk of financial abuse.[7]

1.25The committee notes that financial abuse generally refers to actions aimed at controlling access to money or finances, however, for the purposes of this report, the term financial abuse will include economic abuse, which more broadly refers to controlling economic resources (e.g. employment, education, housing, transport and food) beyond money and finances.

1.26Chartered Accountants Australia and New Zealand (CAANZ) pointed out that financial abuse often escalates and may continue for extended periods of time after separation. CAANZ highlighted the following common forms of financial abuse that can occur post separation:

intentionally delaying family law property proceedings or negotiations. Tactics may include failing to attend, failing to respond, refusing to negotiate, non-disclosure of assets, signing forms incorrectly and vexatious litigation;

failing to pay joint debts;

failure to disclose assets. Parties have a disclosure obligation to provide full and frank disclosure of all information relevant to the matter, including assets. Non-disclosure may impact the just and equitable division of property; and

refusal to pay child support.[8]

Prevalence in Australia

1.27Financial abuse can occur between partners or other family members such as parents and children in circumstances of elder abuse, between relatives, or in other family-like relationships such as with carers or housemates. Anglicare WA emphasised that, although financial abuse can occur in various circumstances, it is predominantly perpetrated by men against women in intimate relationships and can occur during any stage of a relationship, even after it has ended.[9]

1.28Women’s Legal Services Australia also pointed out that financial abuse disproportionately affects women compared to men:

Women are twice as likely to experience financial and economic abuse as men. Financial abuse is a gendered issue because women face unique structural and systemic barriers to economic and financial security.[10]

1.29Ms Rebecca Glenn, the Founder and Chief Executive Officer of the Centre for Women’s Economic Safety, made it clear that financial abuse is a national issue:

What we do know is that we see people experiencing financial abuse and problems with financial and government institutions and agencies as a result of that financial abuse across every socio-economic group, across every age group and across every culture.[11]

1.30The most comprehensive source of information on the prevalence of financial abuse in Australia is the ABS’s Personal Safety Survey (PSS), which in 2021–22 measured economic abuse.

1.31Of the 9.9 million women in Australia, the ABS stated that 27 per cent or 2.7 million have experienced violence, emotional abuse, or economic abuse by a cohabitating partner. Specifically, 16 per cent or 1.6 million women have experienced partner economic abuse. Comparatively, 7.8 per cent or 745,000 men in Australia have experienced partner economic abuse (Figure 1.1).[12]

Source: ABS, PSS 2021–22, www.abs.gov.au/statistics/people/crime-and-justice/partner-violence/2021-22#prevalence-rates (accessed 19 August 2024).

a. Refers to a partner the person lives with, or has lived with at some point, in a married or de facto relationship.

b. Refers to the number of men/women who have experienced cohabiting partner violence/emotional abuse/economic abuse since the age of 15, expressed as a percentage of all men/women aged 18 years and over.

1.32The ABS also noted that women with a disability were more likely than women without a disability to have experienced economic abuse by a partner (4.6 percent compared with 2.4 per cent).[13]

1.33The ABS highlighted that women are more likely to have experienced economic abuse when they are in their main childbearing and rearing years (35 to 54 years). Additionally, this demographic includes both the median age for marriage (30.9 years in 2022) and the median year for divorce (43.7 years in 2022) (Figure 1.2).

Source: ABS, PSS 2021-22, www.abs.gov.au/statistics/people/crime-and-justice/partner-violence/2021-22#prevalence-rates (Accessed 19 August 2024).

1.34In the PSS, it was reported that people experience economic abuse at greater levels by previous partners compared to a current partner (Figure 1.3). The survey found that of the 1.6 million women in Australia experiencing economic abuse, 1.5 million had experienced it by a previous partner and only 173,000 women experienced financial abuse by a current partner.[14]

Source: ABS, PSS 2021-22, www.abs.gov.au/statistics/people/crime-and-justice/partner-violence/2021-22#prevalence-rates (accessed 19 August 2024).

Partner refers to a partner the person lives with, or has lived with at some point in a married or de facto relationship.

1.35The Multicultural Women’s Alliance Against Family Violence observed that the ABS only measures cohabiting partner economic abuse rather than intimate partner and family member economic abuse. Furthermore, the current estimates of economic abuse are likely larger than the statistics indicate.[15]

1.36The Economic Abuse Reference Group (EARG) highlighted a report by Deloitte Access Economics commissioned by the Commonwealth Bank of Australia (CBA), titled ‘The cost of financial abuse in Australia’,which found that 43Australian women were subjected to financial abuse every hour in 2020. However, the EARG further noted that the true prevalence is likely far higher given the underreporting of all forms of domestic and family violence.[16]

1.37The Deloitte Access Economics report found that prevalence of specific forms of abuse differs depending on gender (Figure1.4). The report also found that the most common form of financial abuse was withholding or controlling victims’ income, followed by preventing the victim from working.

Source: Deloitte Access Economics analysis on behalf of CBA, The cost of financial abuse in Australia, 2022, www.commbank.com.au/content/dam/caas/newsroom/docs/Cost%20of%20financial%20abuse%20in%20Australia.pdf (accessed 20 August 2024).

1.38The Redfern Legal Centre’s (RLC) Financial Abuse Service NSW assisted over 550 victim-survivors between 2019 and 2022 in NSW. RLC highlighted that this number increased in 2023 to over 300 victim-survivors requesting assistance, with over 1500 services provided. These services included:

561 legal advices;

443 legal tasks;

72 representation cases;

43 self-representation cases; and

417 referrals to other support services.[17]

1.39Similar to RLC’s Financial Abuse Service NSW, AFCA reported that complaints involving financial abuse have been increasing. In the period between 1July2022 to 31 May 2024, AFCA received 2,140 complaints flagged as cases involving or relating to family violence or financial abuse.[18]

1.40Aboriginal Family Legal Service WA highlighted a report by Bankwest, titled ‘Hidden Costs Report’, which found that 36 per cent of adults who participated in the report had experience financial abuse in 2023. This was an increase of 3percent from 2022 and seven per cent from 2021.[19]

Prevalence of financial abuse of older people

1.41The NSW Ageing and Disability Commission emphasised that, since the commission’s commencement in 2019, calls have increased by 34 per cent and reports have increased by 85 per cent. The commission noted that the prevalence of financial abuse among older people is increasing due to a combination of factors, including:

continued growth in the ageing population;

the relatively greater wealth, including assets, of older generations and the pending generational transfer of this wealth; and

financial and housing pressures on younger generations.[20]

1.42Relationships Australia stated that one in six older Australians reported experiencing elder abuse in a 12-month period. Financial abuse was the third most common form of elder abuse (2.1 per cent) in Australia after psychological abuse and neglect.[21]

1.43At the committee’s public hearing in Canberra, Dr Susan Cochrane from Relationships Australia pointed out the prevalence of elder abuse in aged care:

… the Royal Commission into Aged Care Quality and Safety indicated a figure in the realm of 39.2 per cent of abuse each year within residential aged care. [With reference to the Australian Institute of Family Studies findings that 14.8 per cent of people over the age of 65 will experience some form of abuse] …that 14.8 per cent translates to around 660,000 older people each year who will experience one or more subtypes of elder abuse.[22]

1.44The National Elder Abuse phone line recorded a 36 per cent increase in calls in 2023-24 compared to previous years. Reports from state and territory elder abuse services showed similar trends of increasing reports, with financial elder abuse becoming increasingly more common.[23]

1.45Relationships Australia expressed concern that, over the next two decades, financial elder abuse will increase sharply amid the expected $3.5 trillion intergenerational wealth transfer.[24]

1.46The Australian Human Rights Commission reported that, during this time, Australia’s population will become the oldest it has ever been. The number of people aged 65 and over will double, and the number of working age people will decline. The commission noted that this shift will likely coincide with growing economic pressures including the rising cost of living, lack of affordable housing and low wage growth, which together with demographic changes and the rising trend of ‘inheritance impatience’ are likely to exacerbate the risk and prevalence of financial elder abuse.[25]

Financial abuse and domestic and family violence

1.47Financial abuse is a common form of domestic and family violence. Domestic abuse is an urgent national problem in Australia, with on average one woman killed every nine days by a current or former partner.[26]

1.48Dr Amanda Gearing asserted that domestic and family violence is not always physical and that forms of coercive control, such as financial abuse, can be the main or only form of abuse until physical abuse occurs:

… the most controlling coercive controllers do not use physical abuse—because they don't need to. If you look at the case of Hannah Clarke, the first physical attack on her was the murder. If we wait for a physical attack, we will have more women dying, and some men.[27]

1.49Domestic and family violence takes a toll on women’s health and wellbeing, as well as on families and communities. The Australian Institute of Health and Welfare reported that intimate partner violence contributes to more death, disability and illness in women ages 25 to 44 than any other preventable risk factors.[28]

1.50The Australian National Research Organisation for Women’s Safety (ANROWS) reported that in Australia ‘an estimated 80–90 per cent of women who seek support for domestic and family violence have experienced financial abuse’.[29] ANROWS further reported that economic or financial abuse was present in over one quarter of cases where a female victim was killed by a male primary domestic violence abuser.[30]

1.51The ABS report that, of the 2.7 million women who have experienced violence, or emotional or economic abuse by a cohabiting partner, 50 per cent have experienced both violence and financial abuse.[31]

1.52At the committee’s public hearing in Canberra, Dr Tessa Boyd-Caine, Chief Executive Office of ANROWS, asserted that financial abuse can be identified in isolation but is usually part of broader range of factors taking place in the context of domestic and family violence:

It might be part of controlling behaviour; it might be part of emotional and other abuse; it might be part of a whole raft of non-physical forms of abuse. It's not necessarily experienced in isolation in a way that allows us to control that in isolation and assume that that has itself addressed the underlying experience of domestic and family violence.[32]

1.53Dr Boyd-Caine also emphasised the impact of domestic and family violence on financial security and the ability to leave abusive relationships:

The impact we see really clearly is that it has been framed as an impossible choice, that you can't escape the violence, if you're seeking to leave a relationship, if you don't have the financial independence and security to do that. The extent to which joint accounts or joint responsibility for accounts might limit peoples access to finances is a very real barrier to some of the choices they might want to make … But the very clear connection between financial independence, financial security and the resources that people have to ensure their own safety and to seek help when they're not, that evidence is really clear. And so, the absence of that financial independence, the absence of that financial security is a very real barrier to people being able to address their own safety concerns in the case of women and to being able to look after children in their own right when we're thinking about the impact that family violence has on children.[33]

1.54This sentiment was echoed by WEstjustice, who emphasised that unresolved financial abuse and financial insecurity can have detrimental effects on victim-survivors’ physical safety and health. WEstjustice observed that financial insecurity and abuse could result in someone returning to an unsafe relationship.[34]

1.55At the committee’s public hearing in Perth, Ms Shenane Hogg—a victim-survivor of both financial abuse and domestic violence—shared her story about how physical violence was used to further her financial abuse:

My personal experience began with financial exploitation. I found myself footing bills, lending money, losing control of my own finances and even having debts incurred in my name. I felt trapped and powerless. Attempts to resist only resulted in escalated aggression and abuse. Despite holding a respectable job, I was suffering silently at home. Eventually, a colleague noticed something was wrong. I was a victim—and I am a survivor—of financial abuse and domestic violence. I endured multiple head injuries and a nine-month coma, leaving me with lifelong health challenges.[35]

1.56Although there is currently a lot of advocacy occurring in this space, Women’s Legal Services Australia highlighted that, while there has been some progress, there is still insufficient understanding about family violence and the dynamics of financial abuse within many Australian banks and financial institutions.[36]

1.57CAANZ’s submission referred to a review undertaken by KPMG which provided extensive examples of the ways in which financial abuse can manifest (Figures 1.5 to 1.10). Such examples are essential for informing the training of frontline staff in both the financial services industry and in government agencies to better identify the ways in which financial abuse may manifest.[37]

Source: KPMG Australia and Department of Prime Minister and Cabinet, Preventing the financial abuse of women: literature and desktop review, 2020, pp 47–50

Source: KPMG Australia and Department of Prime Minister and Cabinet, Preventing the financial abuse of women: literature and desktop review, 2020, pp 47–50

Source: KPMG Australia and Department of Prime Minister and Cabinet, Preventing the financial abuse of women: literature and desktop review, 2020, pp 47–50

Source: KPMG Australia and Department of Prime Minister and Cabinet, Preventing the financial abuse of women: literature and desktop review, 2020, pp 47–50

Source: KPMG Australia and Department of Prime Minister and Cabinet, Preventing the financial abuse of women: literature and desktop review, 2020, pp 47–50

Source: KPMG Australia and Department of Prime Minister and Cabinet, Preventing the financial abuse of women: literature and desktop review, 2020, pp 47–50

Financial elder abuse

1.58Financial elder abuse or exploitation is the misuse or theft of an older person’s money or assets. Financial elder abuse can cover a broad spectrum of behaviours including but not limited to:

using the older person’s finances without their permission;

misusing a legal document such as an enduring power of attorney;

withholding care for personal financial gain; and

selling or transferring property against the older person’s wishes.[38]

1.59Compared to family and domestic violence, perpetrators of financial elder abuse are often family members, mostly adult children, which can make reporting financial elder abuse more difficult for older people. The Australian Human Rights Commission reported that only one third of older persons seek help when they are being abused.[39]

1.60The Australian Human Rights Commission emphasised that financial elder abuse could have serious impacts on older people’s physical and mental health, livelihoods and human rights. The Commission also expressed that financial elder abuse has been associated with higher levels of stress and depression, and an increased risk of nursing home placement and hospitalisation.[40]

1.61It was observed that financial elder abuse can look different for older people with a disability, older First Nations people and older people from culturally and linguistically diverse (CALD) backgrounds.[41]

1.62The Aged Rights Advocacy Service (ARAS) highlighted the impacts that ‘humbugging’ has on older First Nations people. ARAS defines ‘humbugging’ as the:

… unreasonable and repeated demands that are placed on an older Aboriginal person by a family member, for money, accommodation or payment of goods or services. Humbugging occurs as a result of a range of factors, including socio-economic and cultural obligations in Aboriginal communities.[42]

1.63ARAS emphasise that the act of humbugging may compromise the well-being of elders if they give up money that was set aside to pay for their groceries, medications, housing or general wellbeing.[43]

Inquiries and reports

1.64This section summarises Federal parliamentary inquiries and government reports, and state and territory inquiries and royal commissions relevant to issues of financial abuse.

National Plan to End Violence against Women and Children 2022–2030

1.65The National Plan to End Violence against Women and Children 2022–2030 (National Plan) was released in October 2022 and is underpinned by two 5-year plans and a dedicated Aboriginal and Torres Strait Islander Action Plan.[44]

1.66The National Plan identifies financial and economic abuse as a key area of focus for addressing gender-based violence in Australia. The National Plan highlighted that financial abuse can be used as a form of coercive control by using finances to control and regulate the day to day lives of victim-survivors.[45]

1.67The National Plan outlines an expectation that financial institutions actively work to prevent abuse through their products and services.[46]

Domestic, Family and Sexual Violence Commission

1.68The Domestic, Family and Sexual Violence Commission (the Commission) was established on 1 July 2022 and is an independent agency that focuses on ending gender-based violence and progressing the objectives outlined in the National Plan.[47]

1.69In August 2024, the Commission published its ‘Yearly Report to Parliament’, which provided an update on progress towards the objectives of the National Plan. Although this report did not include any updates on financial abuse, financial abuse is a key area of focus in the National Plan.[48] The committee looks forward to seeing progress reported in future reports to parliament.

Previous Federal Parliament inquiries and Government reports

1.70The House of Representatives Standing Committee on Social Policy and Legal Affairs tabled a report in 2021 titled ‘Inquiry into family, domestic and sexual violence’ that examined non-physical forms of violence, including financial abuse. The Standing Committee on Social Policy and Legal Affairs defined financial abuse as follows:

Financial abuse is a form of coercive control where a perpetrator takes control of a victim-survivor’s financial affairs, such as personal expenditure and the management of bank accounts, investments, superannuation and assets such as the family home, in order to restrict the victim-survivor’s access to economic resources, to hinder their financial independence and/or to inflict economic harm.[49]

1.71The Standing Committee on Social Policy and Legal Affairs highlighted that women are especially vulnerable to financial abuse and noted that victim-survivors can be trapped in abusive relationships because they do not have the financial means to escape or, if they decide to leave, to stay away permanently. The committee tabled its final report in March 2021 and made the following recommendations in relation to financial abuse:

Recommendation 31: The Committee recommends that the next National Plan provide funding for programs, including in schools, to improve the financial literacy and reduce the financial abuse of women;

Recommendation 32: The Committee recommends that the Australian Government work with the states and territories (other than Victoria) to provide funding for an increased number of financial counsellors; and

Recommendation 33: The Committee recommends that the Attorney-General take the following measures to enable the identification of financial information and facilitate superannuation splitting:

• develop an administrative mechanism to enable swift identification of financial information, including superannuation, by parties to family law proceedings or victim-survivors of family, domestic or sexual violence; and
• amend the Family Law Act 1975 and relevant regulations to reduce the procedural and substantive complexity associated with superannuation splitting orders, including by simplifying forms required to be submitted to superannuation funds.[50]

72. Other parliamentary inquiries that also considered financial abuse include:

The Finance and Public Administration Reference Committee tabled a report titled ‘Domestic violence and gender inequality’ in November 2016, which included a section on financial literacy and government action to address financial abuse.[51]

The Legal and Constitutional Affairs Reference Committee tabled a report titled 'The practice of Dowry and the incidence of dowry abuse in Australia’ in February 2019.[52]

The Community Affairs References Committee tabled a report in 2015 on ‘Violence, abuse and neglect against people with disability in institutional and residential settings, including the gender and age-related dimensions, and the particular situation of Aboriginal and Torres Strait Islander people with disability, and culturally and linguistically diverse people with disability’ that included a section on financial abuse and neglect.[53]

1.73The Standing Committee of Attorneys-General commenced consultations on enduring powers of attorney and released a consultation paper in October 2023 titled ‘Achieving greater consistency in laws for financial enduring powers of attorney’. The consultation process focused on addressing financial abuse of older Australians.[54] The Attorney-General’s Department advised further consideration of this topic will continue through 2024.[55]

1.74In 2022, The Department of Prime Minister and Cabinet’s Office for Women alongside Swinburne University, RMIT University, South East Community Links, and Good Shepherd Australia New Zealand published the following guide: ‘Supporting Women’s Economic Safety: A guide to Prevention and Action on Financial Abuse within the Financial Service Sector’. The guide aims to support organisations in their capacity to build knowledge and awareness of financial abuse and develop industry best practice.[56]

State and territory inquiries and reports

1.75The New South Wales Joint Select Committee on Coercive Control inquired into coercive control as a form of domestic abuse, which included mentions of financial and economic abuse. The Joint Select Committee tabled a report titled ‘Coercive control in domestic relationships’ in June 2021. Although the report makes no direct recommendations regarding financial abuse, it does reference that almost half of all domestic violence murders involved financial abuse.[57]

1.76The Queensland Women’s Safety and Justice Taskforce have published two reports on proposed reforms to address domestic violence and the justice system. Volume 2 of the taskforce’s first report, titled ‘Hear her voice – Addressing coercive control and domestic and family violence in Queensland’,includes discussion of financial and economic abuse. However, the report does not make any specific recommendations regarding financial abuse.[58]

1.77The South Australian Government established a royal commission into Domestic, Family and Sexual Violence in late 2023. Although the terms of reference do not explicitly reference financial or economic abuse, they do refer to ‘all forms of domestic, family and sexual violence’. The final report is due on 1 July 2025.[59]

1.78The Victorian Government established a Royal Commission into Family Violence in 2015, which reported in 2016. The report consisted of eight volumes and examined the causes of financial insecurities, included economic abuse. The report looked at post-separation poverty and financial hardship, the manipulation of child support payments and the connections between economic abuse and family violence.[60]

1.79The report made two relevant recommendations:

Recommendation 111: The Victorian Government encourage the Australian Bankers’ Association, through its Financial Abuse Prevention Working Group, to develop a family violence–specific industry guideline [within 12 months]. This should be supported by training and education for relevant banking staff, to help them understand, identify and deal with economic abuse associated with family violence.

Recommendation 155: Victoria Police, with advice from the Priority Community Division, scope options for a trial of a dedicated family violence and elder abuse response team in one Victoria Police local service area. The team should have the capacity to investigate financial abuse [within two years].[61]

International comparisons

1.80This section summarises relevant overseas jurisdictions and how financial abuse is expressly addressed in connection with financial services. This section will review the scope of financial services legislative and regulatory frameworks in Canada, Ireland and the United Kingdom.

Canada

1.81Financial Services regulation in Canada is shared between federal and provincial governments. The federal government has jurisdiction over banks, which are governed by the Bank Act, whereas the provinces regulate other financial services such as credit unions.[62]

1.82The Financial Consumer Agency of Canada regulates financial entities, and as part of this regulatory arrangement the Financial Consumer Agency of Canada monitors the Code of Conduct for the Delivery of Banking Services to Seniors. This code includes some principles relevant to financial and economic abuse:

Principle 1: requires banks to establish and implement appropriate policies, procedures and processes, including in respect of identifying and escalating incidents of suspected financial abuse.

Principle 3: specifies that banks will provide staff training regarding financial abuse, fraud and scams.

Principle 4: requires banks to make appropriate resources available to employees, including regarding financial abuse.

Principle 5: states that banks will endeavour to mitigate potential financial harm to seniors (including from financial abuse).[63]

1.83The Canadian Bankers Association has published the following guides which seek to address financial abuse: Commitment on Powers of Attorney, and Joint Deposit Accounts and Protecting Yourself from Financial Abuse.[64]

Ireland

1.84Similar to other members of the European Union, Ireland is subject to the European Single Supervisory Mechanism for banking and, as such, the European Central Bank is the main regulator for significant institutions, and the Central Bank of Ireland for less significant institutions.[65]

1.85Ireland’s major representative body for the Irish financial services sector, the Banking and Payments Federation Ireland, have published principles on financial abuse. These principles include:

raising awareness and encouraging disclosure;

training staff;

identifying and appropriately responding;

minimising the need for customer to repeat their story within the same firm;

helping customers to regain control of finances; and

signposting and referring to services.[66]

United Kingdom

1.86The main framework in the United Kingdom (UK) for the banking, financial services and insurance industries is the Financial Services and Markets Act 2023 (UK). The financial services firms and financial markets are regulated by the Bank of England’s Prudential Regulation Authority and the Financial Conduct Authority (FCA).[67]

1.87The FCA has published guidance titled ‘Guidance for firms on the fair treatment of vulnerable customers’, which sets out what financial firms should do to comply with their obligations to treat vulnerable customers fairly.[68]

1.88In 2021, the UK implemented significant reforms to domestic abuse laws, through the Domestic Abuse Act 2021 (UK), which included economic abuse. In response to this Act, the Home Office issued guidance to financial services firms regarding the expectations of firms to support victim-survivors.[69]

1.89UK Finance, a trade association for the UK financial services sector, has developed a financial abuse code. The code guides industry responses to vulnerable customers who have experience economic or financial abuse. The code sets out number of principles for financial services firms, including:

raising awareness of the existence and impacts of financial and economic abuse;

making information available for financial institutions on how they can help those experiencing financial and economic abuse;

measures to strengthen customer services for those experiencing financial and economic abuse, including encouraging disclosure and offering support;

training to improve skills and capability of staff and support for these staff; and

undertaking continuous improvement, monitoring and evaluation.[70]

The UK Financial Ombudsman Service investigates complaints from customers in regard to a wide range of financial matters. The Financial Ombudsman Service receives complaints from people who have been impacted by economic or domestic abuse and can consider if financial business could have done more to help or step in to support vulnerable customers.[71]

Footnotes

[1]The committee’s inquiry website is available at: www.aph.gov.au/Parliamentary_Business/Committees/Joint/Corporations_and_Financial_Services/FinancialAbuse.

[2]Australian Banking Association, Submission 99, p. 2.

[3]Council of Attorneys-General, National Plan to Respond to the Abuse of Older Australians [Elder Abuse] 2019-2023, 2019, p. 3.

[4]Australian Financial Complaints Authority (AFCA), Submission 132, p. 5.

[5]Centre for Women’s Economic Safety, Submission 82, p. 6.

[6]WEstjustice, Submission 113, pp 4–5.

[7]Department of Social Services (DSS), Submission 89, p. 3.

[8]Chartered Accountants Australia and New Zealand, Submission 20, p. 2.

[9]Anglicare WA, Submission 107, p. 3.

[10]Women’s Legal Services Australia, Submission 62, p. 4.

[11]Ms Rebecca Glenn, Founder and Chief Executive Officer, Centre for Women’s Economic Safety, Committee Hansard, 28 June 2024, p. 3.

[12]Australian Bureau of Statistics (ABS), Personal Safety Survey: Partner violence, 2021–22, www.abs.gov.au/statistics/people/crime-and-justice/partner-violence/2021-22#prevalence-rates, (accessed 19 August 2024).

[13]Australian Bureau of Statistics (ABS), Personal Safety Survey: Partner violence, 2021–22, www.abs.gov.au/statistics/people/crime-and-justice/partner-violence/2021-22#prevalence-rates, (accessed 19 August 2024).

[14]ABS, Personal Safety Survey: Partner violence, 2021–22, www.abs.gov.au/statistics/people/crime-and-justice/partner-violence/2021-22#prevalence-rates (accessed 19 August 2024).

[15]Multicultural Women’s Alliance Against Family Violence, Submission 40, p. 1.

[16]Economic Abuse Reference Group (EARG), Submission 108, p. 6.

[17]Redfern Legal Centre (RLC), Submission 115, p. 2.

[18]AFCA, Submission 132, p. 7.

[19]Aboriginal Family Legal Service WA, Submission 37, p. 4.

[20]NSW Aging and Disability Commission, Submission 81, p. 8.

[21]Relationships Australia, Submission 21, p. 13.

[22]Dr Susan Cochrane, National Policy Manager, Relationships Australia, Committee Hansard, 28June2024, p. 38.

[23]Australian Human Rights Commission, Submission 105, p. 8.

[24]Relationships Australia, Answers to questions on notice, 28 June 2024 (received 26 July 2024).

[25]Australian Human Rights Commission, Submission 105, p. 9.

[26]Australian Retail Credit Association (ARCA), Submission 53.1, p. 4.

[27]Dr Amanda Gearing, private capacity, Committee Hansard, 13 September 2024, p. 2.

[28]Australian Institute of Health and Welfare, Family, domestic and sexual violence in Australia, 2018, www.aihw.gov.au/reports/family-domestic-and-sexual-violence/family-domestic-sexual-violence-in-australia-2018/summary (accessed 30 August 2024).

[29]Australian National Research Organisation for Women’s Safety (ANROWS), Submission 12, [p. 1].

[30]ANROWS; Australian Domestic and Family Violence Death Review Network, Australian Domestic and Family Violence Death review Network Data Report: Intimate partner violence homicides 2010–2018, 2022, p. 55.

[31]ABS, Personal Safety Survey: Partner violence, 2021–22, www.abs.gov.au/statistics/people/crime-and-justice/partner-violence/2021-22#prevalence-rates (accessed 19 August 2024).

[32]Dr Tessa Boyd-Caine, Chief Executive Officer, ANROWS, Committee Hansard, 28 June 2024, p. 12.

[33]Dr Tessa Boyd-Caine, Chief Executive Officer, ANROWS, Committee Hansard, 28 June 2024, p. 12.

[34]WEstjustice, Submission 113, p. 6.

[35]Ms Shenane Hogg, Private capacity, Committee Hansard, 10 July 2024, p. 22.

[36]Women’s Legal Services Australia, Submission 131, p. 6.

[37]CAANZ, Submission 20, p. 2; KPMG Australia and Department of Prime Minister and Cabinet, Preventing the financial abuse of women: literature and desktop review, 2020, pp 47-50.

[38]Australian Human Rights Commission, Submission 105, p. 6.

[39]Australian Human Rights Commission, Submission 105, p. 7.

[40]Australian Human Rights Commission, Submission 105, p. 6.

[41]Australian Human Rights Commission, Submission 105, p. 7.

[42]Aged Rights Advocacy Services, Submission 15, p. [8].

[43]Aged Rights Advocacy Services, Submission 15, p. [8].

[44]Attorney-General’s Department (AGD), Submission 102, p. 2.

[45]Commonwealth of Australia, National Plan to End Violence against Women and Children 2022–2032, 2022, p. 49.

[46]Women’s Legal Services Australia, Submission 62, p. 4.

[47]Domestic, Family and Sexual Violence Commission, Yearly Report to Parliament, 21 August 2024, pp2–3.

[48]Domestic, Family and Sexual Violence Commission, Yearly Report to Parliament, 21 August 2024.

[49]Standing Committee on Social Policy and Legal Affairs, Inquiry into family, domestic and sexual violence, March 2021, p. 144.

[50]Standing Committee on Social Policy and Legal Affairs, Inquiry into family, domestic and sexual violence, March 2021, pp 165–166.

[51]Finance and Public Administration Reference Committee, Domestic violence and gender inequality, November 2016, p. 40.

[52]Legal and Constitutional Affairs, The practice of Dowry and the incidence of dowry abuse in Australia, February 2019.

[53]Community Affairs Reference Committee, Violence, abuse and neglect against people with disability in institutional and residential settings, including the gender and age-related dimensions, and the particular situation of Aboriginal and Torres Strait Islander people with disability, and culturally and linguistically diverse people with disability, November 2025, pp 89–91.

[54]AGD, Consultation paper, Achieving Greater Consistency in Laws for Financial Enduring Powers of Attorney, September 2023.

[55]AGD, Submission 102, pp 5–6.

[56]Department of Prime Minister and Cabinet’s Office for Women, Cook K, Mattila P, Symington N, Bowman Madaan R, Dilger K, Maury S, Taffe S, Pye, A, Sinclair S, Burgin R, Kocsis, Eversole R, Hiruy K, Supporting Women’s Financial Safety: A Guide to Prevention and Action on Financial Abuse within the Financial Service Sector, 2022.

[57]New South Wales Joint Select Committee on Coercive Control, Coercive control in domestic relationships, June 2021, p. 3.

[58]Queensland Women’s Safety and Justice Taskforce, Hear her voice – Addressing coercive control and domestic and family violence in Queensland, Volume 2, 2021, pp 28–30.

[59]Royal Commission into Domestic, Family and Sexual Violence South Australia, Terms of Reference, 4 March 2024.

[60]Royal Commission into Family Violence Victoria, Volume IV Report and recommendations, March 2016, pp 93–101.

[61]Royal Commission into Family Violence Victoria, Volume I Summary and recommendations, March2016, pp 76 and 87.

[62]Ms Karen Man, Chair, Global Financial Services Regulatory, Baker McKenzie, Who regulates banking and financial services in your jurisdiction? Canada, 2021, https://resourcehub.bakermckenzie.com/en/resources/global-financial-services-regulatory-guide/north-america/canada/topics/who-regulates-banking-and-financial-services-in-your-jurisdiction (accessed 15 August 2024).

[63]Canadian Bankers Association, Voluntary Commitments and Codes of Conduct Code of Conduct for the Delivery of Banking Services to Seniors, 2019.

[64]Please see: Canadian Bankers Association, Voluntary Commitments and Codes of Conduct Code Commitment on Powers of Attorney and Joint Deposit Accounts, 2014; Canadian Bankers Association, Protecting yourself from financial abuse.

[65]European Central Bank, Single Supervisory Mechanism, www.bankingsupervision.europa.eu/about/thessm/html/index.en.html (accessed 15 August 2024).

[66]Banking and Payments Federation Ireland, BPFI Principles on Financial Abuse, 2022.

[67]Please see: Financial Services and Markets Act 2023; Bank of England, Prudential Regulation Authority; Financial Conduct Authority.

[68]Financial Conduct Authority, Guidance for firms on the fair treatment of vulnerable customers, February 2022,www.fca.org.uk/publications/finalised-guidance/guidance-firms-fair-treatment-vulnerable-customers (accessed 15 August 2024).

[69]Domestic Abuse Act 2021 (UK), para. 1(3)(d) and ss. 1(4); Home Office, Domestic Abuse Act 2021 Statutory Guidance, July 2022, p. 16.

[70]UK Finance, Financial Abuse Code, December 2021, //www.ukfinance.org.uk/system/files/2022-12/Financial-Abuse-Code-2021_Updated_2022.pdf (accessed 15 August 2024).

[71]Financial Ombudsman Service, Complaints involving economic and domestic abuse, 6 December 2023, www.financial-ombudsman.org.uk/businesses/complaints-deal/complaints/complaints-involving-economic-domestic-abuse (accessed 15 August 2024).