What Is Economic Abuse?
Economic abuse is a pattern of behavior that controls a person's ability to acquire, use, and maintain economic resources, thereby undermining their economic security and potential for self-sufficiency. This form of abuse falls under the broader umbrella of Social and Behavioral Finance as it examines how individual behaviors and social dynamics impact financial well-being. It is a pervasive and insidious form of abuse that can have significant long-term effects, impacting a survivor's financial independence, emotional well-being, and overall quality of life.37 Economic abuse extends beyond direct monetary control to include a wide range of tactics designed to create financial dependence and limit freedom.36
History and Origin
Historically, economic abuse was often intertwined with established gender roles within households, where men were traditionally seen as having primary control over household finances. The legal principle of coverture, for instance, in some jurisdictions, historically granted husbands control over their wives' property and earnings.35 It was not until the late 19th century that legal reforms began to grant married women the right to own and control property independently.34
The recognition of economic abuse as a distinct form of violence against women is relatively recent. Until about a decade ago, it was frequently subsumed under psychological abuse, if acknowledged at all.33 Landmark legislation, such as the UK's Domestic Abuse Act 2021, has officially recognized and defined economic abuse in law, encompassing any behavior with a substantial adverse effect on a victim's ability to acquire, use, or maintain money or other property, or to obtain goods or services. Similarly, the Violence Against Women Act (VAWA) in the United States was reviewed in 2021 to include economic abuse in its definition of domestic violence, specifying it as behavior that is coercive, deceptive, or unreasonably controls or restrains a person's ability to acquire, use, or maintain economic resources.32,31 This legislative recognition is a crucial step in enabling legal and systemic responses to this hidden form of abuse.30
Key Takeaways
- Economic abuse involves controlling or sabotaging a person's access to financial resources and other economic necessities.
- It often occurs alongside other forms of domestic violence, such as physical or emotional abuse, and is a significant barrier to a survivor's ability to leave an abusive relationship.29
- Tactics can include preventing employment or education, controlling income and spending, accumulating debt in another's name, or destroying property.28,27
- The long-term effects include financial instability, damaged credit scores, limited access to financial products, and difficulty securing housing or employment.26,25
- Governments and organizations are increasingly recognizing economic abuse and developing initiatives to provide support and education.24,23
Interpreting Economic Abuse
Economic abuse is interpreted by examining patterns of controlling behavior that impact an individual's financial autonomy. This form of abuse is not always about direct theft of money but often involves subtle, coercive tactics that chip away at a person's ability to earn, save, or spend freely. For instance, an abuser might prevent a partner from working or advancing their career, thereby limiting their [income]. They might also control access to bank accounts, demand detailed accounting of all spending, or even incur significant [debt] in the victim's name without their knowledge or consent.22
The impact of economic abuse is often assessed by the degree to which a person's financial well-being and independence have been undermined. This can manifest as a lack of [savings], poor credit, or an inability to cover basic living expenses. Recognizing these signs is crucial for identifying economic abuse and providing appropriate support to those affected.
Hypothetical Example
Consider "Maria," who has been in a relationship with "David." David gradually takes over all financial responsibilities, insisting he is "better with money." Initially, Maria sees this as helpful. However, David then gives Maria a strict allowance, demanding receipts for all purchases and questioning every expense. He convinces her to quit her job, claiming he wants her to focus on their home, but then criticizes her for not contributing to household expenses.
Over time, Maria finds herself with no independent [income] and no access to their joint bank accounts. When she tries to apply for a loan for an emergency, she discovers David has taken out multiple loans in her name, severely damaging her [credit scores]. Maria is now financially dependent on David, making it incredibly difficult to leave the relationship, as she has no money for housing or essentials. This scenario illustrates how economic abuse can manifest through controlling access to funds, sabotaging [employment] opportunities, and creating coercive debt.
Practical Applications
Understanding economic abuse is crucial for various sectors. In financial services, banks and credit unions are increasingly training staff to identify signs of economic abuse among their customers, such as unusual transaction patterns, coerced loan applications, or sudden changes in account access. This training helps frontline employees recognize subtle indicators and direct individuals to appropriate support services.21,20
Government agencies are also implementing strategies to address economic abuse. For example, the UK government has launched an interactive guide for call handlers in public sector bodies, like HMRC, to help them spot and tackle economic abuse when dealing with the public, particularly in debt management contexts.19,18 This recognizes that individuals may be in [debt] due to an abuser's actions. Furthermore, in the legal system, the inclusion of economic abuse in definitions of domestic violence, as seen in Canada's Divorce Act and the US Violence Against Women Act, strengthens legal protections for survivors.17,16 For example, a toolkit developed in collaboration with charities like Surviving Economic Abuse aims to help public sector bodies understand, identify, and support people experiencing economic abuse.15
Limitations and Criticisms
One limitation in addressing economic abuse is the difficulty in proving coercive control, as the behaviors are often subtle and can be disguised as typical financial management within a relationship. Unlike physical violence, economic abuse may not leave obvious marks, making it challenging to document and prosecute in legal settings.14,13 Survivors may not realize they are experiencing abuse until significant financial damage, such as large [debt] or a ruined [credit scores], has already occurred.12
Furthermore, the focus on male-perpetrated violence towards female survivors in much of the existing research represents a limitation, as economic abuse can occur in various relationship dynamics and affect individuals of any gender. While efforts are underway to improve recognition and support, there remain calls for greater investment in frontline support services and more comprehensive training across all sectors to ensure that economic abuse is consistently identified and addressed.11 Challenges also exist in unwinding complex financial obligations created by abusers, which can leave survivors in long-term financial distress even after leaving the abusive relationship.10
Economic Abuse vs. Financial Abuse
While the terms "economic abuse" and "financial abuse" are often used interchangeably, economic abuse is a broader concept that encompasses financial abuse.,9
- Economic Abuse: This term refers to any behavior that controls a person's ability to acquire, use, and maintain economic resources. These resources are not limited to money but also include housing, transportation, food, [employment], and educational opportunities. Economic abuse aims to undermine a person's overall [economic security] and potential for self-sufficiency.8,7
- Financial Abuse: This is a subset of economic abuse that specifically involves patterns of behavior affecting a person's ability to acquire, use, or maintain money or finances. This can include controlling bank accounts, hiding [assets], misusing joint funds, or accumulating [debt] in another's name.6,5
In essence, all financial abuse is a form of economic abuse, but not all economic abuse is strictly financial. For example, preventing someone from attending college to limit their earning potential is economic abuse, but it doesn't directly involve control over existing money, as financial abuse typically would.
FAQs
What are common signs of economic abuse?
Common signs include an individual having little to no access to money, being denied control over their own [income] or [savings], having their spending heavily monitored, being prevented from seeking or maintaining [employment] or education, or discovering large amounts of [debt] in their name that they did not incur.4
How does economic abuse impact a person's financial future?
Economic abuse can severely damage a person's [credit scores], leave them with substantial [debt], limit their access to essential [financial resources] like bank accounts or loans, and hinder their ability to achieve [financial independence]. This can make it challenging to find housing, secure new employment, or make future [investment] decisions.3,2
Are there resources available for survivors of economic abuse?
Yes, there are a growing number of resources. Many organizations offer [financial counseling] and support services specifically designed for survivors of domestic violence, including those who have experienced economic abuse. Government bodies and financial institutions are also developing toolkits and training to better identify and assist victims.1