Domestic violence, which often includes financial abuse, is on the rise because of stress created by the pandemic, according to Teal Inzunza of the Urban Resource Institute, a nonprofit organization that works to combat domestic violence and homelessness.
The outcomes of domestic violence situations for survivors could be dramatically improved if financial advisors had a better understanding of what victims were going through, Inzunza, program director of the Economic Empowerment Program at the Urban Resource Institute, and a licensed master social worker, said during an interview today.
Many financial advisors donate their time and expertise to vulnerable populations and work with organizations to help those who are underserved. They can be “advocates for the domestic violence survivors and help victims understand that these bad situations are something they can recover from,” she said. Ninety-eight percent of domestic violence cases have a financial element, she said.
The Urban Resource Institute, one of the largest providers of domestic violence residential services in the nation, says economic empowerment and education are essential services in supporting survivors re-establish a new, healthy, and independent life. Financial uncertainty is a known trigger of abuse, as well as a barrier to escaping it, the institute said in a statement.
Classes about domestic violence are being taught in social work studies, but not enough are included in financial studies, Inzunza said. Advisors could help victims see the red flags that serve as a warning that someone is a financial abuser, she said.
“One of the things potential victims should be looking for is ‘coerced debt.’ These are situations that do not involve fraud, but one person, such as a spouse or partner, convinces the victim to take on debt they do not want. Often a physical threat to the victim, their children or pets is involved,” she said.
“Once victims are out of the violent situation, they can end up with thousands of dollars of debt that they did not even know existed or did not know was in their name,” Inzunza said. “Most states and the federal government do not provide protection for this type of debt and there may be little the victim can do. Coerced debt can have long-range consequences and prevent the victim from being able to find a place to live, get a credit card, or even get a phone.”
A financial advisor can help victims unravel these financial entanglements and sometimes can act as an advocate for the victim, she said, adding that this is the type of work the Urban Resource Institute does.
Another red flag that Inzunza has seen play out is for a potential abuser to hold a spouse’s or partner’s immigration status against them and use it as leverage to gain financial control. This can involve the abuser trying to access tax refunds or social benefits. A person from another country may have a difficult time understanding the complicated financial situations in the United States or may have a language barrier, Inzunza pointed out.
“Financial advisors need to be available and affordable to domestic violence survivors,” she said. “They can help by understanding what the survivor is going through and by being as supportive and nonjudgmental as possible.”