Building A Safety Net Against Economic Abuse

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Building A Safety Net Against Economic Abuse

Sabotaging her job. Refusing to work. Demanding she accounts for every cent. Destroying her credit. Restricting food, shelter, transportation, and medicine. These are just a few examples of economic abuse. It’s a form of domestic violence that affects most women in abusive relationships, the consequences of which often continue even after they exit their relationship.

Social entrepreneur Meseret Haileyesus founded the Canadian Centre for Women’s Empowerment (CCFWE) to build social, financial, and regulatory protections against economic abuse. She spoke with Ashoka’s Carolina Nieto about the important steps banks, utility companies, industry regulators, government, policy-makers, and all of us can take to build a more just financial system with survivors of abuse in mind.

Carolina Nieto: For those of us who don’t know, what is economic abuse and who is affected by it?

Meseret Haileyesus: Economic abuse is a unique and under-reported form of domestic violence, where someone seeks to control their partner’s ability to acquire, use and maintain economic resources. That includes money, economic resources, and financial decision-making power in the family, but it goes beyond financial control.

For example, it includes interfering with a victim’s employment and educational endeavors, preventing victims from receiving other forms of income such as child support, public assistance, or disability payments, and restricting access to necessities like food, shelter, bank accounts, or transportation. But the most common form of violence is economic exploitation: when the perpetrator intentionally engages in behaviors aimed at destroying the victim’s financial resources or credit. They may take out a loan in their partner’s name and mismanage it, gamble jointly earned money, refuse to pay bills, or steal from them. This leads to extreme financial insecurity, homelessness in some cases, and trauma. Economic abuse is often accompanied by other forms of violence, including physical, psychological, and emotional abuse.

Nieto: How common is it?

Haileyesus: Global data shows that more than 95 percent of women who experience domestic violence also experience economic abuse. Withholding money for food, clothes and other basic necessities is experienced by 93 percent of women in this situation. The impacts on mental health and chronic diseases are also well documented. This form of violence makes it really difficult for women to leave their abusive relationship. It affects everyone regardless of socio-economic class, skin color, immigration status, gender, identity, race, you name it. Though in Canada, Black, Indigenous, and people of color are highly impacted, because of other systemic barriers they face.

Nieto: You founded the Canadian Center for Women’s Empowerment because you saw a big gap in addressing and mitigating these impacts. What was your starting point?

Haileyesus: Agencies dealing with survivors, including financial institutions, social services and utility companies, often fail to support women, meaning that survivors are struggling to manage the impacts of economic abuse alone. And one of the reasons is that it’s an invisible issue that we don’t have much data about. That’s why we focus on building evidence-based research to inform public policy. Understanding the nature of economic abuse is the first critical step to build support for women and to fix our broken systems.

We recently conducted the first national study on economic abuse in Canada, where we surveyed social service providers, financial institutions and survivors. We saw a real lack of awareness and a need for culturally-sensitive, trauma-informed educational materials and spotted key reform opportunities. All of this research feeds into our policy work and the tools we build for social service providers, banks, private stakeholders, consumer lawyers, and more to ensure women get the opportunity to heal, lead and thrive.

Nieto: What steps can financial institutions take to help women facing economic abuse?

Haileyesus: First, we have to build the capacity of bank employees and credit collectors so they can provide trauma-informed and violence-informed customer service. The second most important thing banks need to do is adopt a confidentiality policy, especially for women with a joint bank account with their perpetrator so their transactions (and location) can’t be tracked. We’re asking banks to escalate and flag their client’s accounts to trigger privacy protections if they have experienced domestic violence. Regarding credit card repayments, our policy recommendation includes negotiating longer grace periods – extending it from 60 days to six months – to give women a chance to settle into their new life with their children. We’re also making recommendations that would make it easier for women to open a bank account even if she has no ID – because they had to leave it with their abuser – or permanent address. Hopefully, a lot of this will be implemented in two or three years and I’ll be able to share our success story with you.

Nieto: Are there examples of good policies in Canada that guard against economic abuse?

Haileyesus: Good question. Policymakers, local and federal governments, and financial institutions now recognize the impact of economic abuse in Canada. We are glad that thanks to our work, the federal government included economic abuse in Canada’s National Action Plan to End Gender-Based Violence. We’ve gotten to the point where there is now an understanding of this issue, and that’s a huge step.

To move us further, we also established the National Task Force on Women’s Economic Justice: a group of financial institution leaders, consumer lawyers, community organizations, and social policy advocates that provides strategic direction and leadership to government and industry on the financial impact of economic violence. Inspired by experiences in the UK, Australia and Israel, we’re asking the Financial Consumer Agency of Canada, and the Canadian Banker Association to create a volunteer financial code of conduct for Canadian banks to enhance equitable customer services and protect and support women. And there are now more than 100 cities across Canada, the U.S., Israel, New Zealand, South Africa, Australia and the U.K. that recognize November 26 as a national day to raise awareness about economic abuse.

Nieto: Finally, bringing this down to our personal circle of family and friends, what can we do to support loved ones who are going through economic abuse?

Haileyesus: First, you can inform them about our checklist resource, with tips on things like changing their passwords, storing financial records in a safe location, opening their own bank account, obtaining a copy of their credit report, and more. Having information about your assets and liabilities is key. Second, please don’t judge or stigmatize anyone because of her trauma or the abusive situation she finds herself in. Listen and talk to her, and help her find some resources. A lot of women don’t leave abusive situations because they fear society will judge them. Finally, we need to talk about building healthy financial relationships without shame or guilt, and start early with young kids. It shouldn’t be a taboo.

This conversation was edited for brevity and clarity.

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