Chapter 4Safety by design and industry wide options for reform
4.1Ms Rebecca Glenn, Chief Executive Officer of the Centre for Women’s Economic Safety (CWES) emphasised that there are multiple points of intervention that financial institutions can take to address financial abuse:
I think that the most malicious perpetrators will always find a way, but there are many interventions, points of friction, that we can put in place which will also provide points of evidence, and I think that’s a worthwhile endeavour.
4.2This chapter of the report will expand on additional options for reform that could be applied to the financial services sector more broadly, including:
safety by design;
Design and Distribution Obligations;
terms and conditions modernisation;
positive friction; and
employee training.
4.3This chapter will also address specialised support for additionally vulnerable customers, including but not limited to culturally and linguistically diverse customers; Aboriginal and Torres Strait Islander Australians; and individuals living in rural and regional Australia.
Safety by design
4.4Traditional financial products and services are developed for customers with healthy relationships and equal access to money. However, perpetrators of financial abuse use a range of tactics, including some which are unintentionally enabled or exacerbated by the design of financial products and services.
4.5In 2019, the eSafety Commissioner’s Safety by Design practices and principles was published, which highlighted that, instead of retrofitting safeguards after an issue has occurred, safety by design focuses on the ways risk mitigation can be invested in at the front end of product design.
4.6The eSafety Commissioner reported that there are three safety by design principles that provide online platforms and services with guidance to assist with incorporating, assessing and enhancing user safety. These principles are:
service provider responsibility;
user empowerment and autonomy; and
transparency and accountability.
4.7Flequity Ventures asserted that these principles provide a framework that can be tailored to the finance sector to assess the risks of product weaponisation and to identify the necessary policy, systems, processes and procedures.
4.8Ms Catherine Fitzpatrick’s discussion papers published by CWES, titled Designed to Disrupt: Reimagining banking products to improve financial safety and Designed to Disrupt: Reimagining general insurance products to improve financial safety,called on the finance sector to develop a tailored Financial Safety by Design framework and diagnostic tool to assess whether their products include features that prevent their misuse and mitigate potential harm. Additionally, it was noted that this work should be developed in conjunction with victim-survivors, community service providers and experts in family and domestic violence and financial abuse.
4.9Ms Laura Bianchi, Managing Solicitor at Redfern Legal Centre, submitted that banks offering multiple offset accounts is an example of Safety by Design:
… [For example,] AMP offers an option to have two offset accounts … I think that is a good example of where we can look at product design and apply [it] … to the rethinking of how relationships work … [embedding] safety by design …
4.10CWES recommended that the finance sector be required to develop a financial Safety by Design framework and assessment tools, building on the Safety by Design framework developed by the eSafety Commission for the technology sector, to ensure the burden for ensuring safety never falls solely on the user.
4.11Flequity Ventures echoed the above recommendation and further recommended that, in consultation with the financial services industry, family and domestic violence experts, including those with lived experience, academics, community service providers and safe regulatory-design experts, develop a tailored financial safety by design tool to assess whether financial products and services could enable or exacerbate abuse.
Design and Distribution Obligations
4.12The Design and Distribution Obligations (DDO) were introduced to help consumers obtain appropriate financial products by requiring:
issuers of financial products to design products that are likely to be consistent with the likely objectives, financial situation and needs of the consumers for whom they are intended;
issuers and distributors of financial products to take reasonable steps that are likely to result in financial products reaching consumers in the target market for the product defined by the issuer; and
issuers to monitor consumer outcomes and review products to ensure consumers are receiving products that are likely to be consistent with their likely objectives, financial situation and needs.
4.13There is a growing prevalence of weaponisation of financial products and services. The Ecstra Foundation stated that a reference to the risk of misuse of financial products should be included in the DDO guidance.
4.14Family and domestic violence can severely impact a victim-survivor’s ability to manage mortgage repayments or secure credit following an abusive relationship. While responsible lending obligations provide important consumer protections and, in some circumstances, help detect financial abuse, they can also create barriers for victim-survivors seeking to refinance.
4.15The Ecstra Foundation emphasised that consideration needs to be given to appropriate regulatory relief and improved processes for credit repair to support victim survivors to maintain mortgages and recover from credit damage due to financial abuse.
4.16The Financial Rights Legal Centre pointed out that there is scope for DDOs to influence product design and distribution practices to minimise financial abuse. Additionally, the Financial Rights Legal Centre highlighted the following guidance from the Australian Securities and Investment Commission (ASIC) that states that, in complying with DDOs, financial institutions should:
… consider consumer vulnerabilities, and how those vulnerabilities may increase the risk that consumers are sold products that do not meet their objectives, financial situation and needs, and will lead to poor consumer outcomes.
4.17However, it was noted that the extent of the obligation and lack of specificity in the ASIC guidance about how to design and distribute financial products to protect vulnerable customers such as victims of financial abuse, mitigate against DDOs having an influence on product design.
4.18The Economic Abuse Reference Group recommended that ASIC’s guidance on DDOs be improved by providing more specific guidance about designing and distributing financial products to protect vulnerable consumers, such as victim survivors of financial abuse.
4.19Flequity Ventures recommended that DDOs be expanded to consider customers impacted by family and domestic violence and financial abuse, and the potential for perpetrators to cause harm by misusing products and services. Further, Flequity Ventures noted that DDOs should require the finance sector to take proactive steps to address the risks of potential misuse of their products, in the same way as employers have a positive duty to prevent sexual harassment.
Terms and conditions
4.20At the committee’s public hearing in Canberra, Ms Catherine Fitzpatrick, Founder and Director of Flequity Ventures, made clear the rationale behind the request for financial providers to update their terms and conditions to address abusive behaviour:
The recommendation around putting financial abuse in your terms and conditions is to say, ‘We want a contractual obligation that says we need you to behave with respect to another customer, and we won’t tolerate it if you don’t, so there will be consequences.’
4.21The Australian Banking Association (ABA) noted that many banks have changed their product terms and conditions to prohibit the use of their products and services to perpetrate financial abuse and provide consequences for customers who misuse their products and services. The ABA further noted that, under the new terms and conditions, customers who do misuse products can be contacted and the misuse of the product discussed with them.
4.22Similar to the banking sector, Suncorp reported that it is taking steps to update its financial abuse and inappropriate behaviour terms and conditions to reflect that an insurance policy cannot be used for financial or other types of abuse and that using them in this way can have serious consequences.
4.23Ms Fitzpatrick highlighted that a number of organisations have updated their terms and conditions in relation to financial abuse:
… more than 25 businesses across banking, insurance, telecommunications, education and technology have mobilised against perpetrators. They’ve adopted my recommendation to include ‘financial abuse’ in their terms and conditions and policies, and in effect that bans the misuse of their products and services for financial abuse. It’s a setting a global standard for protective measures.
4.24The ABA reported that, based on a sample of six banks including four major banks, approximately 37 banking services have been terminated because of breaching the new terms and conditions relating to financial abuse or unacceptable behaviour relating to abuse in transaction descriptions.
4.25CWES submitted that all financial service providers should introduce terms and conditions that make it clear that:
products and services are not to be misused to abuse;
financial abuse has serious impacts on victim-survivors;
customers who misuse products and services will be warned or exited from the institution; and
in some circumstances, financial abuse will be reported to law enforcement.
4.26Many inquiry participants agreed with the recommendation that financial service providers should explicitly mention financial abuse in their terms and conditions.
Positive friction
4.27As highlighted in Chapter 3, the number of online financial products and services continues to grow, and reduced information requirements and human involvement in applying for and accessing online products and services removes ‘friction points’ that are an opportunity to reduce harm by preventing, detecting and responding to financial abuse.
4.28Ms Jasmine Opdam, Senior Policy and Advocacy officer from Redfern Legal Centre, emphasised the benefits of adding positive friction:
… what is the harm to the rest of the population if they have to wait an extra, in some cases, 60 seconds, five minutes, for a loan to be approved? We have retailers using the point-of-sale exemption in the National Consumer Credit Protection Regulations to provide finance on the spot at a car dealership at an electronic store, where you speak to a shop assistant, who might be 18 years old and have no training in identifying coercion or financial abuse. You pop a loan application in the victim-survivor’s name, and it is approved by someone clicking a button at a financial institution online within 60 seconds. Do we need to be providing credit within the space of 60 seconds if it means that we're putting a large segment of the population at considerable financial harm and costing victim-survivors and our entire national economy over $10 billion a year?
4.29BankWAW noted that customers expect fast and efficient banking services and there is an inherent conflict with this expectation when banks adopt processes that slow down payment services.
4.30EACH recommended that financial service providers introduce safeguards and frameworks to prevent financial abuse through online financial services by:
reviewing and considering reinstatement of process friction points;
deploying AI as a process friction point to detect unusual and suspicious account activity; and
introducing requirements for bank account name holder matching with government services.
4.31The Financial Rights Legal Centre recommended that the introduction of appropriate friction to lending processes should be required to expose financial abuse throughout the lifetime of the loan, including at the on-boarding stage.
4.32AFCA also supported the introduction of initiatives to respond to risks at all stages of a product’s lifetime. It considered that product application and assessment systems should be designed to effectively screen for undue influence and coercion by introducing positive friction, where appropriate, to mitigate risks and ensure that all customers provide free and informed consent during the product application process.
Necessary friction in bankruptcy proceedings
4.33The Economic Abuse Reference Group Western Australia highlighted unique risks associated with bankruptcy. The process of declaring bankruptcy is often straightforward, with individuals being presented with documents to sign without fully understanding the long-term implications. This can be problematic for vulnerable and disadvantaged people, such as women in abusive situations, who may not realise how bankruptcy can affect any future Family Court matters.
4.34Noting that the consequences of bankruptcy could worsen victim-survivors’ financial empowerment and independence, Economic Abuse Reference Group Western Australia recommended the addition of the following necessary friction points:
mandatory legal advice before signing bankruptcy documents;
enhanced notification on bankruptcy documents about the potential impacts on Family Court proceedings and financial arrangements;
cooling-off periods to reflect on the documents; and
access to support services that offer financial counselling and legal support.
Employee training
4.35The importance of employee training was emphasised by many inquiry participants, and particularly that employees of banks must be well versed in identifying financial abuse and how to respond appropriately. Uniting Communities noted that the standard of employee knowledge on financial abuse and how to respond effectively varies significantly between banks and within banks.
4.36CWES submitted that training in domestic and family violence often only includes a passing reference to financial abuse. Further, it submitted that this is not sufficient for organisations like banks and other essential services that are dealing with victim-survivors of financial abuse.
4.37To improve financial providers’ response to victim-survivors, CWES asserted that relevant staff must receive specific training on financial abuse to identify how their products and services are being misused by perpetrators, and what challenges victim-survivors face in navigating financial services safely. The training should be relevant to staff roles, and employees in specialist vulnerability teams should undertake more detailed training in the dynamics of coercive control and the intersection of financial abuse with other forms of family and domestic violence.
4.38The Finance Sector Union (FSU) submitted that its members reported positively on workplace training that was effective and took place over multiple sessions. The training included face-to-face facilitated sessions, was trauma informed and included wraparound services to support staff are dealing with customers experiencing financial abuse. However, the FSU reported that this training was only available to specialist teams and was not provided to the majority of frontline staff.
4.39Additionally, the FSU reported that its members overwhelmingly want additional training to help them support customers who are victims of financial abuse. The frontline workers who are not in specialist teams do not believe that the training they are receiving is sufficient to help them to identify, manage and refer customers who are suffering from financial abuse.
4.40CWES proposed the following recommendations to ensure employees are sufficiently prepared to assist victim-survivors of financial abuse:
financial institutions ensure their staff have training in financial abuse at the appropriate level their role in addition to more general training about domestic and family violence; and
the establishment of a national expert advisory panel to review and approve training in financial abuse.
4.41COBA indicated that it also supported additional information and training resources in relation to financial abuse for financial providers.
Specialised support for vulnerable customers
4.42This section of the chapter will examine specific accommodations required to provide appropriate care to certain subsets of the Australian population. These population subsets include:
culturally and linguistically diverse people;
Aboriginal and Torres Strait Islander Australians;
people living in regional and remote areas of Australia; and
defence communities.
Culturally and linguistically diverse and culturally appropriate responses
4.43Culturally appropriate responses are vital when working with victim-survivors from diverse backgrounds including Aboriginal and Torres Strait Islander Australians, culturally and linguistically diverse (CALD) individuals and migrant individuals, particularly as their help-seeking behaviours may differ from the general population.
4.44The Women’s Legal Services Australia submitted that people from these backgrounds experience types of financial abuse specific to their familial and cultural context or visa status. This can arise from a range of factors, including:
cultural norms and expectations around shared wealth and resource and other forms of accepted cultural obligations;
traditionally gendered management of household finances and clear lines of division of labour in some cultures reinforcing men’s dominance and control over money;
expectations about paying a dowry or repaying immigration expenses;
multi-generational households in which women can face abuse from multiple perpetrators, such as extended family or in-laws; and
temporary visa holders not being able to access emergency or long-term housing support, welfare support, childcare subsidies and other critical assistance because of their visa status.
4.45inTouch asserted that, to provide the most efficient response to CALD communities experiencing financial abuse, financial institutions must ensure that products, resources and service offerings are provided in language and in culturally sensitive ways.
4.46Dr Manjula O’Connor, Executive Director of the AustralAsian Centre for Human Rights and Health, acknowledged the difficulties faced by CALD women when identifying financial abuse:
Language barriers and a lack of knowledge of the system pose barriers to seeking help until it’s too late. I’ve seen women in my practice who have been ripped apart, having their savings all gone, completely lost, by these men who have come into the country—sometimes, even sponsored by the women—and have taken their savings.
4.47At the committee’s public hearing in Melbourne, Mr Peter Gartlan, Co-Chief Executive Officer of Financial Counselling Australia, emphasised the lack of financial literacy and control some migrant women have when arriving in Australia:
I was quite struck recently when I was speaking to representatives of South East Community Links, which is a community agency in the south-eastern suburbs of Melbourne that employs 12 financial counsellors. They were running a financial literacy day with newly arrived women from one particular country. The question was asked of the 24 women, ‘How many of you have a bank account?’ and 16 out of 24 did not know whether or not they had a bank account.
4.48Women’s Legal Services Australia recommended that financial institutions invest in culturally appropriate financial literacy programs and plain language product descriptions, or ways of talking about financial abuse, to promote financial awareness and help-seeking.
4.49inTouch recommended that the provision of interpreters be required by financial institutions if a language barrier is identified, and that employees be trained in appropriate engagement of interpreters and the complexity of interpreting in the family violence context.
4.50Lifeline Australia recommended that training of financial counsellors or for financial counselling services should increased to provide additional support for victim-survivors with a CALD background.
Dowry abuse
4.51The practice of giving and taking dowry is continuing in some Australian multicultural communities. In some circumstances, when brides come to Australia on a temporary or provisional visa they are deceived by their husband and in-laws. For example, a groom may falsify or exaggerate their education, social-status or employment situation in Australia to claim a higher dowry amount. Alternatively, Australian permanent residency status is often used as a bargaining tool to negotiate a higher dowry price where the marriage is arranged between Australian and non-Australian residents.
4.52inTouch highlighted that, in some cultures, dowry is a key financial aspect of a marriage and increases pressure on a woman to stay in a marriage because of the expense that her family has incurred in providing dowry. Further, inTouch highlighted that misuse of dowry is akin to having a debt that requires a woman to remain in the marriage, even if the relationship is violent.
4.53The AustralAsian Centre for Human Rights and Health recommended that the Family Law Act be amended to include dowry abuse as an example of financial abuse under the definition of family violence.
4.54As discussed in Chapter 2, the Family Law Amendment Bill 2024 is currently being considered by the Australian Senate and would amend the definition of family violence in the Family Law Act 1988. The Attorney-General’s Department submitted that dowry abuse would be included as an example of financial abuse.
Aboriginal and Torres Strait Islander Australians
4.55Financial services often lack culturally appropriate resources and support for Aboriginal and Torres Strait Islander Australians. These language and cultural barriers, as well as mistrust in mainstream services, can hinder access to financial assistance and support services.
4.56ASIC pointed out that some of the nuances of how financial abuse is experienced within Aboriginal and Torres Strait Islander communities is due to cultural norms and protocols around the management of money and resources. While there is much diversity within and across Aboriginal and Torres Strait Islander communities, some examples of their financial management practices include:
cultural obligations requiring, or community having a tendency of encouraging, the sharing of financial and other resources based on the cultural principle of reciprocity;
a collective approach to ownership, management and use of money and resources, based on kinship obligations and cultural principles; and
kinship structures providing additional levels of responsibility to immediate and extended family members, in addition to the points above.
4.57Women’s Legal Services Australia highlighted that a ‘one-size-fits-all’ approach is not appropriate for victim-survivors from CALD backgrounds, including Aboriginal and Torres Strait Islander Australians. Aboriginal and Torres Strait Islander Australians face significant barriers in accessing financial services and products for a number of reasons, including but not limited to geography, the cost of services and long wait times.
4.58The Aboriginal Family Legal Service WA recommended greater investment in the development of training and education for financial providers on financial and economic abuse of Aboriginal and Torres Strait Islander Australians by Aboriginal Community Controlled Organisations.
4.59This recommendation was echoed by the Salvation Army who called for the Federal Government to collaborate with Aboriginal and Torres Strait Islander Community Controlled Organisations and financial counsellors to develop and deliver culturally appropriate financial abuse support services.
Individuals living in rural and regional Australia
4.60Regional and remote areas of Australia face difficulties of access to support services for victim-survivors of financial abuse. Limited resources, geographic isolation, and a lack of specialised service providers exacerbate the vulnerability of individuals in these communities.
4.61Economic Abuse Reference Group Western Australia highlighted that regional and remote areas of Australia face challenges of access to support services and legal assistance for victim-survivors of financial abuse. Further, it noted that the scarcity of specialised service providers means that people often lack access to culturally appropriate and trauma-informed support.
4.62Economic Abuse Reference Group Western Australia recommended the enhancement of banking infrastructure and digital inclusion in regional Australia. Due to the nature of online-only platforms being susceptible to abuse and lack of internet connectivity, it recommended increasing the number of bank branches, ATMs and mobile banking units, and improving access to internet connectivity in remote and regional areas to ensure easier access to financial services and online banking.
4.63Uniting Communities submitted that regional areas often have a higher population of older people and that the closure of physical bank branches in regional Australia can result in increased financial elder abuse in those areas.
4.64Mr Jason Goode observed that the isolation of older people living in rural and regional areas of Australia can be used to further facilitate financial abuse:
People can then use that isolation against the elderly to make them feel worse. They can isolate them from their family and push them away from their family.
4.65Uniting Communities recommended that both banks and the government provide digital literacy and financial literacy training options for people, particularly in regional areas, so that customers are not forced to rely on others to access their banking through digital channels. Uniting Communities specified that the digital literacy and financial literacy training options need to include face-to-face delivery.
Defence communities
4.66Dr Rachel Hogg submitted that victim-survivors of financial abuse in defence communities experience additional vulnerabilities relating to the risk of financial abuse and face a range of additional barriers to receiving support.
4.67Dr Hogg further submitted that the following factors add to the vulnerabilities experienced by victim-survivors of financial abuse within defence communities:
the disproportionate likelihood of the primary income within the family unit hinging upon the continued employment of the perpetrator with Defence;
strict standards within Defence for the conduct of personnel; and
the often-disrupted career trajectory of the female victim.
4.68At the committee’s public hearing in Wagga Wagga, Ms Jenny Rolfe-Wallace echoed Dr Hoggs observations and commented on the unique issues associated with victim-survivors in defence communities:
Somebody who is married to a Defence Force member is moved quite frequently. That's incredibly destabilising to their support networks and to their communities. It makes it very hard to obtain work, because an employer is going to know that you’re going to, potentially, be here for maybe a year, maybe three, possibly longer. It does make it very difficult, as the spouse of a Defence Force member, to obtain secure employment and to obtain and build financial security as a result of that.
Exacerbating that is the way that, for example, housing is set up. Often, the spouse of a Defence Force member has no authority to interact on bank accounts, to interact with HR, to interact with the housing providers, which can put them in an incredible position of disadvantage. You then add, to that, concerns about reporting situations because that can impact on their partner’s career, and their partner’s career provides the income for the family. So, it is this situation of isolation.
4.69Ms Rolfe-Wallace recommended that best-practice guidelines be developed to assist financial services to address the specific needs of defence force families who may be experiencing financial abuse.
4.70Defence Bank indicated in response to committee questions on notice that they had no recorded instances of financial abuse within their membership in 2024, and two reported cases of suspected financial abuse within the past 12 months.
4.71The Australian Military Bank, similarly, indicated that:
'[t]he measures and safeguards implemented by our business, combined with the unique support structures and secure environments provided by institutions like the Australian Defence Force (ADF), have resulted in a very low incidence of suspected financial abuse. The existing policies, training programs, and reporting protocols effectively support the identification and response to any potential issues, ensuring that vulnerable customers are protected. Overall, while financial abuse is a critical concern, the data suggests that our proactive measures and vigilant reporting processes are successful in maintaining a secure and supportive environment for our customers.
4.72The Defence Bank response advised:
The Department of Defence include financial abuse as a form of abuse in Defence Strategy for Preventing and Responding to Family and Domestic Violence 2023– 2028 which outlines key initiatives to address family and domestic violence within the Australian Defence Force (ADF) and are supportive of measures adopted to identify this within the Defence community and address it.
4.73The Defence Bank further indicated that:
… the prevalence of financial abuse by current members of the ADF may be less due to the relative comparable independence of many of our members and their partners/spouses due to the nature of their work. A central theme of financial abuse is control and access – and given the nature of defence employment – with regular military exercises, training and deployments, many members and spouses have a great need to operate with financial independence and autonomy. Due to the locations of most Defence Bank branches, we will primarily deal with the individual serving in the ADF. This can potentially result in a one-sided view of financial activity, making financial abuse less apparent and more difficult to identify.
Committee view
4.74Evidence received by the committee has shown that there are relatively simple ways that providers of financial services and products could update their processes to provide better support for victim-survivors of financial abuse. While it is encouraging to see that financial institutions are generally aware of the issue of financial abuse and that many are already implementing financial abuse policies and measures, the committee considers that there is some way to go to achieve the comprehensive industry-wide changes that are needed to provide for the protection of victim-survivors of financial abuse.
Safety by design
4.75The committee acknowledges the work of Ms Catherine Fitzpatrick, who authored the Design to Disrupt discussion papers that examine the banking and general insurance industries and how these sectors could reimagine their products and services for financial safety. The committee commends MsFitzpatrick for her work championing the implementation of safety by design in the finance sector, and the committee strongly supports safety by design as a key strategy to address financial abuse in the finance and banking sectors.
4.76The eSafety Commissioner’s Safety by Design practices and principles for online platforms highlighted that, instead of retrofitting safeguards after problems have occurred, safety by design focuses on investing in risk mitigation at the front end of product design. The committee considers that there would be significant benefits in the implementation of safety by design principles by financial institutions and the development of a framework in consultation with the financial services industry, victim-survivors, family and domestic violence academics, community service providers and regulatory design experts.
4.77The committee notes that an example of safety by design that would be immediately beneficial for consumers and readily implementable by lending institutions is the offering of multiple offset accounts for joint mortgages. The committee considers that this option for new borrowers entering into joint mortgage would provide greater financial independence for both parties and reduce the risks financial abuse that can occur post-separation in relation to joint mortgage accounts.
4.78That the finance sector develops a financial Safety by Design framework and assessment tools. The committee further recommends that the framework is developed in consultation with the financial services industry, victim-survivors, family and domestic violence academics, community service providers and regulatory design experts.
4.79That financial institutions that provide mortgages implement the standard practice of offering multiple offset accounts for joint mortgages.
4.80The DDOs were introduced to provide protections and help consumers obtain appropriate financial products, and the committee has heard strong concerns that the risk of misuse of financial products in relation to financial abuse is not included in the DDO guidance. The committee supports the expansion of DDOs to consider customers impacted by family and domestic violence and financial abuse and the potential for perpetrators to cause harm by misusing products and services.
4.81That the Australian Government expand the Design and Distribution Obligations to include consideration of customers impacted by family and domestic violence, including financial abuse, and the potential for perpetrators to cause harm by misusing products and services.
4.82The committee is encouraged to see that many banks and insurers have changed their product terms and conditions to prohibit use of their products and services to perpetrate financial abuse and introduce consequences for customers who misuse products and services to perpetrate abuse. This is a step in the right direction and the committee believes that all financial institutions should update their terms and conditions to address financially abusive behaviour.
4.83That financial service and product providers ensure that financial abuse is explicitly referenced in the terms and conditions for all financial products.
4.84The committee heard that, as the use of online financial products grows, there is a concomitant reduction in information requirements and human involvement as ‘friction points’ that provide an opportunity to prevent, detect and respond to financial abuse. The committee is concerned about the ease with which loans are approved and concurs with those inquiry participants who questioned the need for almost frictionless and rapid credit and loan approvals processes.
4.85The committee acknowledges that customers expect online banking services to be quick; however, the committee believes that adding appropriate and considered friction points would not unduly slow down application and approval processes and would provide critical opportunities for financial institutions to detect and flag financially abusive behaviour.
4.86That financial institutions implement minimum operating standards, with a view to moving to best practice standards through continuous improvement over time, for the introduction of positive friction points to minimise the risk that a customer is applying for a product under coercion or duress or without providing free and informed consent.
Employee training
4.87The importance of employee training was emphasised to the committee by many inquiry participants, and specifically that employees of banks must be well versed in identifying and responding appropriately to financial abuse. While the committee recognises that financial institutions have increased employee training in relation to family and domestic violence, the evidence received by the inquiry suggests that employees overwhelmingly want additional training to help them support customers who are victims of financial abuse. The committee considers that increased training for employees in relation to financial abuse is a key strategy for ensuring that financial institutions are equipped to address and respond effectively to the issue of financial abuse.
4.88That financial institutions ensure that, in addition to general training about family and domestic violence, all employees have training in financial abuse that is appropriate to their level and role.
Culturally appropriate responses
4.89Culturally appropriate responses are vital when working with victim-survivors from diverse backgrounds including Aboriginal and Torres Strait Islander Australians, CALD individuals and migrant women. Evidence received by the committee has shown that victim-survivors from diverse backgrounds experience financial abuse tactics specific to their familial and cultural context and visa status.
4.90The committee believes that the most efficient response to victim-survivors from diverse backgrounds experiencing financial abuse is for financial institutions to ensure that products, resources and service offerings are provided in language and in culturally appropriate forms. The committee also considers that the provision of interpreters by financial institutions should be required if a language barrier is identified to ensure that the victim-survivor is supported appropriately.
4.91The committee acknowledges the proposal for dowry abuse to be recognised explicitly in the Family Law Act 1988 via the Family Law Amendment Bill 2024, which passed both Houses on 29 November 2024. The new law will amend the definition of family violence to include dowry abuse as a form of abuse.
4.92Evidence received by the committee has shown that a ‘one-size-fits-all’ approach is not appropriate for victim-survivors from all CALD backgrounds, including Aboriginal and Torres Strait Islander Australians. Aboriginal and Torres Strait Islander Australians face significant barriers in accessing financial services and products for a number of reasons, including but not limited to geography, the cost of services and long wait times. To address these differences, the committee proposes that training and education programs on financial abuse of Aboriginal and Torres Strait Islander Australians, developed by Aboriginal Community Controlled Organisations, would be of great benefit to the Aboriginal and Torres Strait Islander community.
4.93That financial institutions, government and relevant stakeholders all provide appropriate support to culturally and linguistically diverse consumers through:
culturally appropriate financial literacy programs and plain language product descriptions or ways of talking about financial abuse to promote financial awareness and help-seeking; and
where a language barrier is identified, the provision of interpreters and employees trained in providing interpreting services in the family violence context.
4.94That the Australian Government support Aboriginal Community Controlled Organisations to develop training and education programs for financial providers to increase understanding of financial and economic abuse of Aboriginal and Torres Strait Islander Australians.
Defence communities
4.95The committee is concerned that, due to the disproportionate likelihood of the primary income within the family unit hinging upon the continued employment of the perpetrator with Defence, victim-survivors of financial abuse in defence communities experience additional vulnerabilities and face a range of additional barriers in receiving support. The committee considers that the development of best-practice guidelines to assist financial services in addressing the specific needs of defence force families would assist in addressing these specific vulnerabilities.
4.96While relevant military and defence financial services providers have reported extremely low levels of financial abuse among their membership, the committee was concerned by the response from Defence Bank which highlighted that this could be a result of the fact that these institutions primarily engage directly with military personnel clients as opposed to their spouses, leading to under-reporting of financial abuse. Defence Bank’s response highlighted that this underreporting ‘can potentially result in a one-sided view of financial activity, making financial abuse less apparent and more difficult to identify’.
4.97The committee commends the attention of the ADF and Department of Defence to the issue of financial abuse and notes its reference in the Defence Strategy for Preventing and Responding to Family and Domestic Violence 2023-28.
4.98The committee considers that the development of best-practice guidelines to assist financial services in addressing the specific needs of defence force families would assist in addressing the specific vulnerabilities of military personnel and their families.
4.99That the Department of Defence and financial institutions co-design best practice guidelines to assist financial services to address the specific needs of defence force families who may be experiencing financial abuse.