Protect your assets and those you love from financial abuse

Talk about money — that way you can stamp out a culture where financial abuse can flourish ...

Protect your assets and those you love from financial abuse. It’s one of those awful topics many of us would prefer to ignore. But we mustn’t, not only to protect ourselves, but also family and friends.

Like most forms of abuse, financial abuse is most likely to be committed by someone close to us.

At its most basic, financial abuse is when money and resources are used to control another person.

This can take many forms. It could be someone taking your money or property without asking and not paying it back.

They could take out loans in your name, or pressure you to take out a loan for them. There are other examples, such as pressuring someone to sell their house so the abuser can use the money.

One Government website says it can be someone living in your home, eating your food and not contributing to any costs.

At first blush that’s an awkward moment for a younger generation, often dubbed the “boomerang generation”, for their tendency to cope with rising costs of living by moving back home.

But that’s the beginning of an unhealthy relationship. No adult should be living off another person and contributing nothing. Even a token amount shows respect for the person who’s taken you in.

Abuse can lead to spiraling levels of debt, losing assets you’ve worked hard to build up, even losing your own home.

It’s bad enough when it happens because of your own bad decisions or bad luck. You definitely don’t want the added sting of it happening because someone took advantage of you.

The difficulty is it’s hard for people in the grips of financial abuse to escape it. Sometimes it’s accompanied by physical abuse. In romantic relationships, the most dangerous time for a person being abused is when they try to leave.

So that’s the bad news. The good news is that there’s something all of us can do right now to stamp out a culture where financial abuse can flourish.

We need to talk more about money.

When we’re more open about our own financial situation, it gives other people the permission to do the same.

And that’s when we’re able to pick up on the first signs that someone we care about is facing financial abuse.

If they don’t have enough money for essentials like food, power or medicine, or they drop previously important hobbies because they can’t afford them.

If money becomes extremely touchy, or they seem confused about big decisions, like why they sold the house.

Those are red flags to take seriously.

If it’s an older person, get in touch with Age Concern. They operate all over New Zealand.

For big sums of money, report it to the police. Or complain to the bank, or Banking Ombudsman, if you think they did something wrong like letting someone withdraw money from another person’s account.

Don’t forget to protect yourself, too.

Be extremely cautious before signing contracts, or becoming a guarantor for someone. If they can’t pay, you’ll be responsible for the debt. That’s the whole point. You don’t have to spend a lot to get independent advice. Drop in to a Community Law Centre as a bare minimum, and talk the situation over.

An unbiased ear can change everything.