Australians are suffering through a "hidden epidemic" of financial abuse, with calls for a co-ordinated effort between banks and super funds to combat the systemic issue.
A federal parliamentary inquiry into financial abuse within Australia's financial services industry handed down a report with 61 recommendations after finding financial abuse was rife across the nation.
Financial abuse involves a person exerting control over their partner or family member’s finances, threatening their financial security.
Among the recommendations include requiring lenders and insurers to ensure customers are not experiencing financial abuse, better reporting mechanisms between financial institutions and police, and improved safeguards and support for victim-survivors.
About 1.6 million women and 745,000 men suffered from partner economic abuse in 2021/22, according to the Australian Bureau of Statistics.
The cost of the abuse to victims was $5.7 billion in 2023.
Victims who managed their own super funds face severe disadvantages, with shortcomings around the superannuation death benefit system, the report says.
The report recommends the government amend superannuation laws to prevent perpetrators receiving death benefits and undertake a review of the COVID-19 early super release scheme to uncover the extent of those coerced to withdraw from their funds.
The Super Members Council, welcomed the unanimous multi-partisan push to end abusers receiving their victims' super after death.
“A perpetrator getting their victim’s super death benefit is an extension of the abuse," chief executive Misha Schubert said.
“The sector is united in calling for reform and sending a clear message that abuse is not tolerated in any form."
People with limited digital literacy are inadvertently becoming susceptible to financial abuse amid a transition to electronic banking - forcing them to rely on others to access their bank services.
The joint committee on corporations and financial services recommends the government outlaw abusive descriptions in electronic money transfers and allow victim-survivors to keep certain information hidden from their perpetrators in joint banking and insurance accounts.
Banks had welcomed recommendations to change privacy laws to allow them to flag financial abuse, Australian Banking Association chief executive Anna Bligh said.
“Significant inroads have been made across the industry over the last decade to better prevent, identify and support customers impacted by financial abuse," she said.
The committee chair, senator Deborah O'Neill, said the issue was a "systemic problem" compounded by gaps in laws, a lack of awareness, and complicity within and across financial institutions.
"The report’s recommendations aim to create a coordinated and comprehensive response from government, financial institutions, and the legal system to combat this hidden epidemic," she said.
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