The Subtly Corrosive Impact of Financial Abuse: Identifying and Assisting Victims: Webinar

Laura BianchiCredit, Debt and Consumer Law Solicitor

Redfern Legal Centre

AcknowledgementOf Country

Outline1.  How to identify financial abuse2.  How to assist someone experiencing financial

abuse3.  Tools and tips for resolving problem debts4.  What outcomes can be achieved? 5.  Legal advice6.  Questions and further resources

RESOURCES: www.rlc.org.au/training/resources/financial-abuse

1. How to identify financial abuse

What is financial abuse?•  Financial abuse is a form of domestic violence

•  Domestic violence is “a pattern of abusive behaviour in an intimate relationship or other type of family relationship where one person assumes a position of power over another and causes fear…It is often referred to as a pattern of coercion and control.” (1800respect)

•  There is no single agreed legal definition of domestic violence in Australia

•  Financial abuse is also referred to as economic abuse

Behaviours1.  Control over day-to-day household finances & material wellbeing2.  Denying accumulation of personal assets or eroding those assets3.  Manipulating credit and debt to the abused partner’s disadvantage4.  Blocking access to social and economic participation5.  Financially monitoring, over-controlling and scrutinising their partner6.  Refusing to contribute7.  Exploiting women sexually in exchange for moneySOURCE: Restoring Financial Safety: Legal Responses to Economic Abuse (see Resources)

Simone’s story

Simone’s story •  Simone’s partner was controlling, manipulative and aggressive. She

was forced to pay for all of their rent, food and bills by herself.

•  He also convinced her to be the sole director and shareholder of a company he wanted to run a business under.

•  He pressured her into getting a business loan in her name for an

expensive car. She never drove the car.

•  When the business went bust, everything was in her name. The car was repossessed and Simone was pursued in court for the remaining debt.

Anna’s story

Anna’s story•  Anna’s partner was violent, assaulting her frequently.

•  Anna worked for her partner’s business but he withheld her wages.

•  Anna had no money so she got a credit card. When her partner found out, he

convinced her to make him a second card holder and he used the card for his

personal and business expenses.

•  Anna got an ADVO but that meant she became unemployed and was not able to get

Centrelink due to her visa status.

•  Anna discovered that her partner had not paid their rent so she was going to be

made homeless.

Jessica’s story

Jessica’s story•  Jessica’s partner convinced her to give him access to her bank

accounts and credit cards.

•  He bought a BMW and pressured her to put the loan in her name.

•  He transferred $100,000 from her account to his personal overseas

bank account.

•  When she confronted him, he strangled her.

•  He fled overseas, leaving her in significant debt. She then acquired

more debt to manage debt and sought advice about Bankruptcy.

How common is it in Australia?

11.5% of Australians experience financial abuse:

•  7.1% of men

•  15.7% of women

Source: 2017 study by RMIT

Among women who have sought help from domestic violence services, up to 90% have experienced

financial abuse.

Source: WIRE, 2014

2. How to assist someone experiencing financial abuse

Keep in mind… •  A person who has experienced financial abuse may not be familiar with

financial language or how to interpret bills, bank statements and letters from debt collectors.

•  Decision making and independence can be overwhelming at first.

•  Financial hardship from leaving a financially dependent relationship can

lead a person to return to the “financial safety” of the abuser so it is important to make sure the person has independent income and support.

Safety

•  Safety must be considered at intake and maintained at every stage of assistance.

•  Ask your client how you can communicate with them safely and record this clearly on any records with their personal information.

•  Be flexible with the time, day, location and duration of your meetings.

Safety (cont.)•  Tell your client to change any pin numbers and passwords to make

sure that credit / debit cards, online banking, email, Paypal, and other online accounts are secure.

•  If safe to do so, they should contact their bank to cancel any secondary credit cards.

•  They may also need to open a personal bank account if they only hold joint accounts.

Important!

•  It is important that a domestic violence safety assessment is performed by a trained expert.

•  1800RESPECT is a 24 hour national sexual assault, domestic violence counselling service that can talk to your client about ways to improve their safety and connect your client with support services.

www.1800respect.org.au , 1800 737 732

Important! (cont.)

•  Your client should seek advice about the protection orders available in your state.

•  Women in NSW can contact the Women’s Domestic Violence Court Advocacy Service for information about the process for obtaining an Apprehended Domestic Violence Order (ADVO). 1800 938 227

Clearly explain your role

•  Identify your skills / the scope of your assistance.

•  Explain the boundaries of the assistance you can provide.

•  Identify appropriate referrals.

Understand the relationship

•  Is the relationship ongoing, recently ended or historical?

•  Are there any children from the relationship?

•  What is the nature of the abuse?

•  What is the client’s current financial and living situation?

•  What debts are currently owed?

Immediate financial help •  Some banks offer emergency assistance packages for customers

experiencing domestic violence.

•  Centrelink offers eligible people income support payments, crisis payments and options for collecting child support.

•  Victims compensation (eligibility varies in each state).

•  Charity services for food, bills and other support.

Types of debt from financial abuse

•  Financial Service Providers (FSP): Personal loans, credit cards, car finance, residential mortgages and business loans

•  Telecommunications: mobile phone and internet contracts.

•  Utilities: electricity, gas and water usage bills and water rates.

•  State penalties and fees: traffic penalties, parking fines, tolls and

council rates.

3. Tools and tips for resolving problem debts

General Tips•  Record a detailed chronology of events from before, during and after

the relationship.

•  Ask the client to provide you with any documents they have about their debts. Remember they may have fled without any possessions but there still may be emails they can access online.

•  Assist the client to request documents and information about the alleged debt directly from the creditor.

General Tips (cont.)•  Present as much evidence as possible including Centrelink

Statements, Letters from treating medical professionals etc.

•  Establish client authority with the external stakeholder as soon as possible to ensure you can contact them without the client being present.

•  Revoke any authority allowing the abuser to contact creditors on behalf of clients.

General Tips (cont.)

•  Ask for a moratorium (weeks or months) while you conduct further research and prepare documentation.

•  Many organisations will display a public commitment to assisting customers who have experience domestic violence and financial abuse. Ensure to remind the organization of these commitments.

•  Notify the creditor of safety issues.

Tools and tips: Financial Service Providers

Financial Service Providers: Tools•  Australian Banking Association Industry Guideline: Financial abuse and family and domestic

violence policies.

•  Ombudsman Guidelines and Determinations:

•  Financial Ombudsman Service: Approach Document on Joint Facilities and Family Violence

•  Credit and Investments Ombudsman: Position Statement 10 - Family Violence

Note: Australian Financial Complaints Authority will take over on 1/11/2018

•  FSP internal financial hardship and domestic violence policies

•  Some banks have emergency assistance packages for customers escaping domestic violence.

Financial Service Providers: Tips

Ask your client about their interaction (or non-interaction) with FSP staff at the

inception of and throughout the life of the account. Assess whether the bank should

have been aware of signs of abuse, such as:

•  Your client could have been seen/heard to be taking instructions for another party

•  Your client remained silent while the other party did all the talking

•  Your client appeared fearful, unfocused or withdrawn (particularly if other person was present)

•  Your client appeared confused or reluctant to talk about what the funds being borrowed will be used for.

Financial Service Providers: Tips•  Some banks have trained staff in domestic violence and financial abuse within their

internal dispute resolution / financial hardship team.

•  It may assist to provide a copy of a protection order to limit the need to detail highly

sensitive information such as physical and sexual assaults.

•  Banks are expected to work with an individual borrower who is requesting assistance with

a joint loan, and discuss options for resolving their financial difficulty.

•  It is considered good industry practice for a FSP to remove a default listing if they

become aware that the borrower has experienced family violence.

Tools and tips: Telcos

Telcos: Tools

•  Most telcos specifically include domestic violence in their financial hardship policies.

•  Telecommunications Industry Ombudsman (TIO): Assisting and responding to customers in financial hardship: Principles and practices - guide for telecommunications providers

•  Telecommunications Consumer Protections (TCP) Code

Telcos: Tips•  Speak to your client about their communication needs. Consider privacy, safety

and connection to family, friends and other supports.

•  Many telcos use busy call centres as the first line of contact with customers. They

will not speak with advocates without authority from the account holder.

•  Staff may not be trained to understand DV and financial abuse. They may ask your

client for details about the abuse which can be distressing for your client. It is best

to communicate directly with the hardship team once you have authority.

Telcos: Tips (cont.)

•  Try to negotiate for the post-paid contract to be cancelled and the client to be moved onto pre-paid credit.

•  Depending on the client’s wishes they may want to have their phone number and/or contacts transferred over.

Telcos: Tips (handsets)•  Check if the mobile handset is under the contract and if so, how much is

outstanding.

•  Telcos may agree to waive the amount owing on the handset if it is returned in

good condition. If the handset is to be returned, make sure the client has an

alternative phone to use.

•  If the handset is damaged, check if the client has been paying for insurance. If the

handset can be repaired or replaced under the insurance claim first, then the client

may be able to return the handset in good condition as above.

Tools and tips: Utilities

Utilities: Tools•  Many providers acknowledge domestic violence in their financial

hardship policies. Some have specific domestic violence policies and trained staff to identify and assist people experiencing domestic violence.

•  Energy & Water Ombudsman NSW

•  NSW Energy Accounts Payment Assistance (EAPA)

•  State government rebates

Utilities: Tips•  If your client has left the home and the utilities accounts are in their name, cancel the

accounts to immediately limit the debt being accrued in your client’s name.

•  If your client remains in the home, raising financial hardship may delay the retailer from

disconnecting the service and allow time for an agreement to be reached.

•  Try to request a waiver of the outstanding usage balance and if your client needs ongoing

services, assist your client to negotiate a financial hardship arrangement for future usage.

•  Some charities, NGOs and community assistance programs will assist clients in paying

their bills on a one-off basis.

Tools and tips: Fines

Fines: Tools

•  Revenue NSW – Name the responsible person

•  View RLC’s previous webinar on Fines and Penalty Notices 1: Challenging the fine (NSW)

Fines: Tips

•  Revenue NSW have a registered advocate direct phone line.

•  Request an extension of time to postpone enforcement action.

•  Determine if the client was driving the vehicle at the time and is liable for

the fine. Confirm details at myPenalty (NSW).

Fines: Tips (cont.)

•  Confirm if it is safe for the client to name the person responsible and complete a statutory declaration.

•  Client will need to make arrangements to get the vehicle in their possession or transfer the registration out of their name if the vehicle is sold.

Tools and tips: Tolls

Tolls: Tools

•  Private toll companies have financial hardship policies.

•  Tolling Customer Ombudsman (VIC, NSW & QLD)

•  Toll Relief from the NSW Government

Tolls: Tips•  Ensure your client updates their personal and financial details with

their e-tag provider. They should remove any unauthorised vehicle number plates on their account.

•  Revoke any authority that allows the abuser to access the client’s e-tag account.

•  Request summary of e-tag usage from toll provider. Determine which tolls your client is liable/not liable for.

Tolls: Tips (cont.)•  Your client can complete a NSW statutory declaration nominating the

driver. Completed forms must be mailed at least 7 days before the due date on the toll notice. A separate statutory declaration is required for each Toll Notice.

•  Important! Your client’s name and address may be given to any

persons or companies that they nominate as the driver. This could be a safety risk you need to make your client aware of.

Tools and tips: Debt collectors

Debt Collectors: Tools

•  Understand your client’s rights and protections under the Australian Consumer Law against Debt Collectors.

•  ACCC: Dealing with Debt Collectors.

•  Australian Banking Association Industry Guideline: Financial abuse and family and domestic violence policies

•  Financial hardship policies

Debt Collectors: Tips•  When corresponding with debt collectors, include the original

creditor. In many cases the original creditor may intervene or have a policy to take back debts that involve financial abuse.

•  Confirm that all correspondence to be sent through advocate if your client doesn’t have a secure or safe email or mailbox.

•  Request to communicate with a staff member that is trained in domestic violence.

4. What outcomes can be achieved?

Outcomes•  Full waiver•  Moratorium (short or long term

arrangement)•  Payment plan •  Reduced amount

•  Hold on fees and interest•  Severing liability•  Cancellation of account•  Waiver of cancellation fees•  Refund•  No default listing•  Removal of default listing

Simone’s story •  Simone’s partner was controlling, manipulative and aggressive. She was

forced to pay for all of their rent, food and bills by herself.

•  He also convinced her to be the sole director and shareholder of a company he wanted to run a business under.

•  He pressured her into getting a business loan in her name for an

expensive car. She never drove the car.

•  When the business went bust, everything was in her name. The car was repossessed and Simone was pursued in court for the remaining debt.

Simone’s Story: Outcome

•  Simone was served with a statement of claim and tried to represent herself against the finance company. Simone’s ex-partner was using the litigation to continue to control and manipulate her. A trial was fast approaching in a superior court and Simone has never had independent legal advice.

Simone’s Story: Outcome •  Simone was referred to RLC. We reviewed the claim. Simone had

limited prospects of defending the matter and was at risk of being ordered to pay hundreds of thousands in costs if she lost the case.

•  We assisted Simone to settle the case for a significantly reduced amount (with no interest) and enter into an affordable payment plan.

•  We are continuing to assist her with other debts from the relationship and business.

Anna’s story•  Anna’s partner was violent, assaulting her frequently.

•  Anna worked for her partner’s business but he withheld her wages.

•  Anna had no money so she got a credit card. When her partner found out, he

convinced her to make him a second card holder and he used the card for his

personal and business expenses.

•  Anna got an ADVO but that meant she became unemployed and was not able to get

Centrelink due to her visa status.

•  Anna discovered that her partner had not paid their rent so she was going to be

made homeless.

Anna’s Story: Outcome•  RLC negotiated with the creditor to waive almost $50,000 in credit card debt. They

agreed to not list any default on her credit report.

•  RLC negotiated with the telco provider to have the outstanding bills waived, postpaid

contracts cancelled and the expensive phones to be returned and any amount

outstanding waived. Her number was transferred to a pre-paid SIM.

•  We negotiated with her landlord to allow her to stay in the home rent free until she could

find alternative accommodation.

•  We arranged for charity services to provide Anna with vouchers and food.

Jessica’s story•  Jessica’s partner convinced her to give him access to her bank

accounts and credit cards.

•  He bought a BMW and pressured her to put the loan in her name.

•  He transferred $100,000 from her account to his personal overseas

bank account.

•  When she confronted him, he strangled her.

•  He fled overseas, leaving her in significant debt. She then acquired

more debt to manage debt and sought advice about Bankruptcy.

Jessica’s Story: Outcome

•  RLC reviewed all of Jessica’s accounts to demonstrate the financial abuse and consequences.

•  RLC negotiated with all the creditors for a full waiver of almost $100,000 debt.

•  RLC continues to work with Jessica to correct her credit report and

seek compensation from the car finance company.

5. Legal advice

When to get legal advice?•  If your client is served with a Statement of Claim.

•  If your client has assets (including a vehicle, superannuation etc.) they should get

advice from a family lawyer.

•  If the debt may be more than 6 years old.

•  If you suspect your client should not have been lent that amount of money in the

first place.

•  If your client cannot reach a suitable agreement direct with the creditor or through

an ombudsman service.

Where to get free confidential legal advice on financial abuse

•  Redfern Legal Centre (local residents only)

•  Most community legal centres: - NSW: https://www.clcnsw.org.au/resource/community-legal-centres-nsw-directory-2018- outside NSW: www.naclc.org.au/need_legal_help.php

•  Legal Aid NSW www.legalaid.nsw.gov.au/contact-us/legal-aid-nsw-offices

6. Questions and further resources

Laura BianchiCredit, Debt & Consumer Law Solicitor

Redfern Legal Centre

RESOURCES: www.rlc.org.au/training/resources/financial-abuse

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