Legal system perpetrates financial abuse

05 Nov, 2019
 
Ayesha Scott
Dr Ayesha Scott

New evidence from AUT shows changes to the Family Court are needed to help protect women and children from financial abuse. The findings follow recommendations in July by New Zealand's Law Commission to change the Relationships (Property) Act.

Financial abuse happens when someone uses financial resources to control and terrorise another person. Often, this form of abuse occurs within intimate relationships. It is more commonly perpetrated by men against women, with devastating consequences for women and their families.

In 2018, AUT Senior Lecturer in Finance Dr Ayesha Scott, with the help of Communication Studies Senior Lecturer Dr Christina Vogels, interviewed 15 women about their experiences of financial abuse after the breakdown of their relationship. Scott says the findings show the importance of this research.

"Financial abuse is an evasive, invasive and largely invisible problem for New Zealand, where we simply don't talk much about money. The silence leaves women vulnerable to this type of violence, which is further perpetuated by our complex financial institutions, and our slow and costly legal system," says Scott, who believes such research can lead to a better understanding of how financial abuse occurs and how to stop it from happening in the future.

Scott's work shows financial abuse can vary in character and intensity. For instance, a husband or boyfriend might control his partner's spending or restrict her access to bank accounts and cash. Or, an intimate partner might refuse to pay for things his family needs or prevent his partner from earning money herself. Sometimes, financial abusers use their partner's name to take out loans or accumulate debt. Post-separation, ex-partners might refuse to pay child support. It is also common to see perpetrators engage in lengthy legal battles with their ex-partner, knowing it will put her under financial strain.

Financial abuse can happen during and after a relationship. Many women highlighted the complicated nature of their household financial matters, particularly citing trusts, which can be complex and opaque, as a vehicle for abuse. Participants also pointed to loss of income, the impact on their future employment prospects and their mental and physical health, as well as the inequity of the eventual relationship property settlement. They said the often expensive, time-consuming and traumatic process of legal self-representation can exacerbate the violence they face. Even after separating from a partner, women spoke of being 'trapped' by either Family Court proceedings, a lack of financial security or, for the mothers interviewed, their child-care arrangements.

Ayesha Scott will present her initial findings at the 2019 NZ Law Society CLE Family Law Conference in Auckland this week.