If the Senate reauthorizes the Violence Against Women Act this year, the legislation could include for the first time a clear definition of financial abuse, a type of control that can prevent survivors of domestic violence from reclaiming their lives.
The bill would follow one that passed in Connecticut in June that also broadened the definition of abuse to include financial control or limiting of financial resources by a partner.
“The definition really helps courts, advocates that are in the courts, and the judges recognize that we aren't just looking for bruises when we are looking for signs of abuse in a relationship,” Connecticut State Rep. Eleni Kavros DeGraw, told Yahoo Money.
About 99% of domestic violence cases have elements of financial abuse, a tactic that involves controlling a survivor's ability to acquire, use, and maintain financial resources, according to the National Network to End Domestic Violence. Survivors often name financial constraints as one of the top reasons for not leaving or returning to abusive relationships.
Banks handling financial abuse 'need to be held to a higher standard'
Karen Robbins is familiar with the real-world consequences of financial abuse.
A mother of three from Simsbury, Conn., Robbins alleges her now ex-husband drained her savings and used her identity to open up more than 10 fraudulent credit accounts, racking up at least $235,000 in credit card debt and $700,000 in debt secured against her home, which is titled only in her name. (Attorneys for her ex-husband declined to respond to Yahoo Money's requests for comment.)
“He always told me that he had the finances covered and would get angry when I asked questions,” Robbins told Yahoo Money. “So, I stopped.”
After filing for divorce, the lawyer-turned-stay-at-home-mom began the long process of clearing her name of fraudulent debts.
"I discovered my credit score had fallen below the minimum needed to access lending capital for basic necessities such as heating, education, healthcare, food and transportation," she said in testimony before the Connecticut General Assembly this year.
Some financial institutions acted swiftly to clear Robbins when presented with evidence, but others did not even though she provided a police report and a signed and notarized fraud affidavit and after she filed reports of ID theft and fraud with the Federal Trade Commission and the U.S. Office of the Comptroller of the Currency.
“I’ve learned banks are only as good as the people who oversee loan and credit accounts,” said Robbins. “Banks need to be held to a higher standard when it comes to spousal fraud and ID theft.”
Within intimate relationships and marriage, it becomes increasingly hard to safeguard against financial abuse because your partner often has access to all of your personal information.
“When we get married, we trust our spouses to have our information and to know what's going on with it," ID Theft Resource Center CEO Eva Velasquez told Yahoo Money.
In abusive relationships, coerced debt can often become a tactic abusers use, Velasquez noted. Coercive debt is tricky because you may know that your partner or family member is using your information to open credit accounts, but you feel threatened or obligated to allow them.
“They are coerced into agreeing to things that they don't want to agree to and it's typically not really looked at as identity theft," Velasquez said. "Instead, it's looked at as a civil matter.”
Coerced debt can also leave a long stain on a survivor's credit report.
“One of the things we’re seeing is victims’ credit being destroyed or them being credit invisible because they don't control their finances,” said Deborah Vagins, CEO of NNEDV, a nonprofit that offers resources to those going through domestic violence.
That can make it difficult for a survivor to start over. Landlords, insurance companies, auto lenders, and others often pull credit reports as part of the application process.
As a result, the NNDEV established the Independence Project, which offers $100 loans to those who have experienced financial abuse and allows them to pay it off over 10 months to help build credit. Since the launch of the project in 2017, more than 450 individuals have completed the project, coming out with an average credit score of 641.
But financial institutions and credit reporting agencies also need to be involved, Vagins said.
“I think it's very important that banks and credit bureaus have internal training and do internal work to understand that there's no one-size-fits-all,” Vagins said, “and that there are going to be unique needs of survivors.”
Adding the definition of economic abuse to the VAWA reauthorization may encourage those institutions to set up specific protocols for survivors. The version the House passed in March included the definition, but the Senate has yet to take up the reauthorization. No timeline is available for when that could happen.
"I support the legislation wholeheartedly. It's a great first step," Robbins said. "But I hope for followup, so that banks and law enforcement are responsible to follow standards set up by the act."