Protecting yourself from financial abuse

Financial abuse has far-reaching consequences for individuals, their families and the community. It can happen to anyone, but some people are at greater risk, including older New Zealanders and people with disabilities.

What is financial abuse?

Financial abuse occurs when someone manipulates, threatens, pressures or otherwise influences you to gain access to your money, property or assets. Abusers often take advantage of the trust or power they are given, or their relationship with you.

There are two broad types of financial abuse.

  1. When it occurs from a family member, friend or caregiver employed to help you.
  2. When you are scammed into providing money to strangers or people you don’t know well.

Examples of financial abuse include when someone:

  • Pressures you to make changes to your will, power of attorney or other legal arrangements.
  • Takes, ‘borrows’ or misuses your money, ATM card, debit card, credit card or bank account without your knowledge or consent.
  • Pressures you to mortgage your home, provide gifts, or invest in ‘too good to be true’ investments so they can benefit without taking on the risk.
  • Coerces you into providing services without being paid or fairly compensated, or expects you to unfairly pay for their expenses. For example, someone shares a home with you and doesn’t contribute to rent, bills, maintenance and other expenses.

Signs you may be at risk of financial abuse

  • You don’t feel confident making major financial decisions alone or don’t understand decisions that someone else is making for you about your money or property.
  • You have an appointed person to manage your finances and you’re concerned that money seems to be disappearing from your accounts, and you don’t know where it’s going.
  • You have strangers contacting you asking for money to claim money that you are owed.

Protect yourself from financial abuse

If the financial abuser is a family member or friend, you may feel conflicted about raising any concerns. While this is understandable, it’s important that you take proactive steps to help keep you, your money and your property and assets secure.

There are a number of things you can do to protect yourself from financial abuse, including:

  • Consider storing important documents with personal and financial information at your local bank in a safety deposit box and don’t share your personal identification number (PIN) or other access codes with anyone.
  • If you’re thinking of giving someone a loan or gift, or you’re facing a major financial decision, talk about it with someone you trust to get a second opinion.
  • Be careful about setting up joint accounts for banking or investments. Joint accounts can’t protect you against financial abuse, so it’s important the person on your joint account is someone you trust.
  • Talk to your bank about the different ways to manage your banking needs, such as pre-authorised bill payments and direct debits. These options let you do your own banking, so you don’t have to give someone else access to your account.
  • Plan ahead and put in place arrangements for how your money and property will be handled if something happens to you and you lose the capacity to make financial decisions. This can lower the risk of financial abuse and help avoid difficulties later, including family conflicts about how best to manage your finances in the future.
  • Keep track of what’s happening with your bank accounts, investments and other assets. It’s your money and it’s your right to ask questions about how that money is being managed. If you can’t do this because you’re ill or face other difficulties, speak to someone you can trust who can help you.

If you suspect someone you know is being financially abused, talk to them about your concerns. If they decline help, don’t give up. It can be difficult for anyone to leave an abusive situation, especially if it involves family members. For more information visit: www.ageconcern.org.nz