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Financial abuse is a not a new phenomenon, but recent events including the Covid-19 pandemic have brought it into sharp relief.
The sad truth is that 2.3 million adults aged 16 to 74 experienced domestic abuse in the year ending March 20201 and one in six women in the UK has experienced economic abuse by a current or former partner2.
In recent years our understanding of all forms of abuse has increased and so too has our consciousness of how much we have yet to understand. The Domestic Abuse Act (2021) includes economic abuse (of which financial abuse is a subset) in the legal definition for the first time. This is an important development and something we have called for previously.
Financial abuse can affect anyone: young and old, male and female and the consequences can be life changing, life threatening and long lasting for the individual concerned.
In 2018, UK Finance launched the first Financial Abuse Code and since then our members have been working with organisations such as Surviving Economic Abuse to develop our understanding of victim-survivors? needs and explore how we can provide a sympathetic, positive response which helps individuals to regain control of their finances.
In 2020, the sector supported the Government's #You are not alone campaign raising awareness of the vital support available and we have seen individual firms develop innovative partnerships which enhance this support.
But we know there is more we can do. We have heard from a range of specialist support organisations that help individuals who face challenges because of their personal circumstances, protected characteristics and socio-economic background that three areas needed further work: consumer facing awareness; support provided to customers in financial difficulties and sector consistency.
The new 2021 Financial Abuse Code focuses on addressing these issues and I am delighted that it includes enhanced consideration of how firms can deal with debt separation, including consideration of controlling and coercive behaviour. This is a complex area and it will continue to be a focus for our members throughout 2022, as currently there is no legal framework for the fair separation of debts or apportionment of credit balances.
We are also working with the Money and Pensions Service to explore how we can develop new consumer money guidance materials, so that individuals can quickly find the information required to help them access the support they need. We will also continue to work with Government and subject matter experts, including those with lived experience, and look forward to the publication of the Home Office Domestic Abuse Strategy.
Finally, I am delighted that 30 members and 40 brands have committed to implementing this Code, including 15 organisations that are making the commitment for the first time. By working together and sharing best practice, customers can be confident that they will be treated sympathetically and positively when they are facing particularly difficult circumstances. We recognise that seeking help may be challenging, but we would always encourage customers to contact their bank or building society as the first step to getting help and support.
1. ONS data, year ending March 2020.
2. Refuge. (2020) Know Economic Abuse, Refuge: London
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Eric Leenders, Managing Director, Personal Finance, UK Finance