So, let’s call her Sophie.
Sophie is a Mum with multiple children who fled an abusive marriage and took out a Domestic Violence Order (DVO) with the Police to protect herself and her children from her ex, their father. The order was granted for a period of five years and there is to be no contact from the father who abusively told Sophie;
“You’ll never be able to survive without me”.
The father, a drug addict, regularly stalked and threatened Sophie. He also ruined her credit rating by fraudulently taking out numerous loans in her name leaving his liabilities for her to pay off. The ex-couple had a home together and Sophie remained living in it after the break up to ensure stability for the children whilst she rode out financial separation from her ex. Sophie’s ex was on the brink of bankruptcy and as co-borrowers on their loan, their house was at risk.
In order to survive the period of transition from dual income to single income, Sophie called her lender and attempted to negotiate a better interest rate on their home loan. A discounted rate was offered… on one condition…
… that the lender obtain consent from her abusive and controlling ex. Yes, the one she had a no contact DVO against who told her “You’ll never be able to survive without me”.
To apply the discount they said there was no option but for them to make contact with him. This was because the loan contract had a ‘two to sign’ method of operation, which was put in place to protect Sophie in the first place. Eventually, despite her protest based on the active no contact DVO, the lender called the ex and attempted to seek his permission to reduce the rate. He refused to take the call and consequently their answer to Sophie was a NO. The rate could not be changed despite the renegotiation originally being successful.
As they had a dual-signatory set up on the loan account, the lender would not budge… even to reduce the interest rate. Something which would have had no bearing on the co-borrower. The irony of the situation was that Sophie had previously set up the dual signature in order to protect herself from further financial abuse and now, at this highly distressing time, that very act was being used to sustain her financial hardship. Her ex refused to sign the document… a very deliberate and cunning act which ultimately punished not only Sophie, but also their children.
This is where I stepped in.
I assisted Sophie in writing a formal complaint to her lender stating that they had failed to assist a customer experiencing financial abuse… despite having policies and procedures in place which should have guided their response. We referenced the Australian Banking Associates 2016 guidelines in dealing with domestic abuse, and I truly believe it is these guidelines that had the impact. The lender had categorically denied they could assist via multiple departments until this was referenced.
The complaint was finally assessed by the lender’s legal team and ultimately the discount was applied… without the consent of the abusive co-borrower. Likely, because common sense prevailed that the co-borrower would not be disadvantaged in any way, and it was preventing financial abuse to assist with the reduction.
Sophie’s rate ended up dropping by 1.47% and the variation fee of $130 was waived, possibly in a desperate attempt to complete the customer recovery process.
Regardless of the logic behind the final decision, what got her through was simply taking a stand against this abuse and holding the lender to account.
Sophie successfully took on the lender and came out on top… and so she should have given the 2016 Australian Banking Association’s commitment to enhance support for family and domestic violence survivors
Because of this rate reduction Sophie was able to stay in the family home and regain control of her finances whilst navigating the muddy waters of financial separation from an abuser.
She wanted her story shared with you all in the hope that her success will inspire others to take a stand against lending behaviours that perpetuate financial abuse.
What is financial abuse anyway?
Financial abuse is an umbrella term for a huge variety of controlling and manipulative behaviours relating to a person’s finances. The perpetrator is usually a current or former partner but can also be any another family member. Generally it is someone who;
- Unreasonably restricts the amount of money you have access to
- Withholds finances, in some cases even your own salary
- Takes out credit using your identity (credit cards, loans, fast finance etc)
- Coerces you into signing financial documents that are legally binding
- Forges your signature to secure any financial gain
- Forbids you to work and enjoy associated financial freedoms and independence
- Micromanages your funds with excessive questioning and interrogation
- Refuses to sign documents to release you of financial liability
- Deliberately sabotages your employment thus rendering you financially dependent
Of course this list is by no means exhaustive. Abusive partners are always finding new and far more creative ways to financially control and destroy their ex-partner.
The long term implications of financial abuse are vast. These may include;
- Asset repossession
- Severe financial hardship
- A poor credit file
- Inability to secure any sort of new finance
- Inability to a secure a rental property