The final report into financial services regulatory frameworks concerning financial abuse in Australia has been tabled and unanimously adopted in federal parliament.
Banks, insurers, superannuation funds, and government service providers all have a responsibility to take action against financial abuse, according to the report.
Conducted by the Joint Parliamentary Committee on Corporations and Financial Services, the report, which was announced in April this year, outlines 61 recommendations to the government, financial service providers, and key stakeholders to help reduce the prevalence and impact of financial abuse in Australia.
It’s calling on banks, insurers, and other financial institutions to proactively identify and support individuals subjected to coercive financial behaviour and abuse, and proposes changes to laws that currently limit the disclosure of concerns on privacy grounds.
Key recommendations made in the report include changes to laws allowing financial institutions to document cases of financial abuse, as well as a review of financial products and government services to ensure perpetrators cannot financially benefit from the death of victim-survivors, including in cases of domestic violence-related suicide.
Additionally, the report proposes improved data reporting, the establishment of ethical obligations within the financial sector, and a review of child support formulas used to determine child support payments to ensure recipients are fairly supported, and non-payments are pursued.
Zaneta Mascarenhas, the Member for Swan and member of the Joint Parliamentary Committee on Corporations and Financial Services, said financial abuse must stop, and believes we all have a role to play.
“We need to create systems that protect against such exploitation and ensure they are designed to prevent harm from occurring in the first place,” Mascarenhas said.
“We’ve seen how systems and financial products are weaponised to inflict harm – harm that prevents victim-survivors from recovering and moving forward. Superannuation, credit and debit products, mortgage arrangements – all of these can be turned into tools of abuse.”
Mascarenhas also said the 61 recommendations made by the report tackle these issues head-on and that she was surprised by some of the findings uncovered by the report.
“We uncovered issues we did not anticipate, demonstrating the strength of democracy and highlighting the role parliamentary inquiries play in addressing issues that confront everyday Australians.”
“The inquiry has highlighted the prevalence and devastating impact of financial abuse. The statistics are shocking – $1.7 billion in unpaid child support is just one example.”
According to the Australian Bureau of Statistics, 1.6 million women and 745,000 men experienced partner economic abuse in 2021-22.
However, anyone can be affected. A 2022 study into elder financial abuse in Australia, which surveyed 7,000 community-dwelling individuals aged 65 and older, found that 2 per cent reported experiencing financial abuse in the 12 months preceding the survey.
Of those people, 42 per cent said they had felt pressured into giving or loaning money, possessions, or property.
Chair of the Committee, Senator Deborah O’Neill, believes that banks and financial institutions can and should be on the frontlines of identifying and stopping financial abuse and hopes this will spark change across the sector.
“Financial abuse is primarily experienced by women and children and is primarily perpetrated by men. It is a quiet but raging epidemic that ruins the lives of those it affects. It has got to stop.” O’Neill said.
“The 61 recommendations of this report are a testament to the strength of the countless victim-survivors who shared their stories throughout the course of this inquiry. Their bravery in pursuit of the national interest has enabled the committee to deliver this unanimous report.”
