A report from UK Finance, the banking and finance industry body, outlines recommendations to help survivors of financial abuse regain financial independence.
Financial abuse occurs when the abuser limits, exploits, or interferes with the victim's resources, such as cell phones or transportation, in order to maintain power and control.
Financial abuse can be an aspect of economic abuse and includes restricting, exploiting, and sabotaging the victim's financial resources, for example, controlling the victim's income or forcing them to take out credit cards or personal loans.
UK Finance said that while many financial firms had signed up to the Financial Abuse Code and were providing a range of support, there was still more work to be done.
In the report, David Postings, chief executive of UK Finance, said: “Research from Surviving Economic Abuse (SEA) found that more than five million women have experienced financial abuse in the past 12 months.
“Of these, 2.5 million had access to their bank accounts restricted, and 2.1 million had credit leaked in their name or had their credit ratings deliberately destroyed.”
He continued: “While positive progress has been made, complex new challenges that prevent victim-survivors from regaining financial independence and achieving economic security must now be addressed.
“The financial services sector has an important role to play and we are committed to playing our part.”
Recommendations in the report include developing options to block payment referrals so customers can decide whether they want to see this information from their payers. Because this can be a way for the abuser to send a message to the victim.
It also recommended the development of a “Tell Me Once” service to enable survivors to disclose abuse to multiple organizations.
A review of how enforced debt is reflected in credit files has also been proposed.
Research by Surviving Economic Abuse found that survivors, on average, owe £27,000 to five creditors, with the result that they often end up paying more than their relationship, as liability for the debt is in their sole name and therefore affects their personal credit reports. It has been shown to last a long time.
There should also be clear, standardized information on how survivors can access professional legal advice, UK Finance said.
They also called for rapid prosecution of economic abuse.
Mortgage lenders should review loans to allow for temporary, agreed arrangements where a survivor wishes to be the sole borrower on a joint mortgage, the report suggests.
Fiona Turner, head of vulnerability, financial inclusion and capacity at UK Finance, said: “We know there can be complexities in helping victims regain control of their finances, and the recommendations in this report address some of these issues. “It will help us resolve it,” he said.
Nicola Sharp-Jeffs, CEO and founder of Surviving Economic Abuse, said: “Financial ties such as a joint mortgage or child support sent alongside abusive messages create an invisible chain for the abuser, allowing them to move forward and safely rebuild their lives. It prevents you from doing so.
“We look forward to working with the UK Treasury, government, financial services companies and regulators to implement what we learn from this report and together we can stop economic abuse once and for all.”
Finance Minister Bim Afolami said in the report: “As Minister of Municipal Affairs, I am proud of the steps the sector has taken so far to address this issue. Prevention and aftermath of economic abuse.
“While important work is being done, this report shows that we still have a long way to go.”
Sheldon Mills, executive director of consumer and competition at the Financial Conduct Authority, said in the report: “We will continue to work with industry, government and charities to raise awareness of this issue and encourage the sharing of best practice. “Companies learn from the experiences of others.”
Several banks or building societies, such as NatWest, Royal Bank of Scotland, Ulster Bank, HSBC UK and Nationwide, have worked to create “safe spaces” in their branches for domestic abuse survivors.
TSB also supports survivors of domestic abuse by providing a safe space and an emergency getaway fund, paying between £50 and £500 depending on individual needs.
Raghu Narula, director of retail banking customer engagement and distribution at NatWest Group, said the bank had contributed a total of £2 million to the SafeLives Circle Fund and had opened safe spaces in more than 360 branches this year.
He said: “We will continue to work with SafeLives and Surviving Economic Abuse to leverage their expertise, so we can continue to develop and strengthen support for our vulnerable customers.”