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Australian banks act to protect customers from financial abuse

Australian banks act to protect customers from financial abuse

7 December 2023

“Seeing the banks make these changes means I feel a sense of safety, security and support; that I matter and that the horrible experience I’ve been through can somehow be useful to help make changes to prevent the misuse and manipulation of gaps in banking systems and processes.” – Victim-survivor of financial abuse

A new report released today from the Centre for Women’s Economic Safety (CWES) shows 13 Australian banks have changed customer contracts to prohibit financial abuse.

Rebecca Glenn, CEO of the Centre for Women’s Economic Safety, says the moves implement a key recommendation of Designed to Disrupt, released last year as a blueprint for the banking industry to make it harder for perpetrators to use financial abuse as a tactic of coercive control.

“Banking products are being misused by financial abusers with devastating, long term impacts on victim-survivors. We help women every day to disentangle finances and rebuild their lives – many of them slugged with sexually transmitted debt.

“It is pleasing to see so many banks taking action to make it clear that a bank account is no place for abuse, and they’ll take action against financial abusers.

“This is the starting point of redesigning products for financial safety.”

Anna Bligh, CEO of the Australian Banking Association, says banks are working together to consider how banking products and services can be made ‘safe by design’, another key recommendation of the CWES report.

“Today we’re hosting a financial abuse roundtable to discuss the recent action several banks have taken to change terms and conditions in bank contracts. This has put customers on notice that banks can and will take action to suspend, cancel or deny individuals access to accounts if the bank identifies them as engaging in financial abuse. The discussion today is about sharing those examples for other banks to consider adopting, protecting customers from financial abuse no matter who they bank with.”

Designed to Disrupt author, Catherine Fitzpatrick, has reviewed the product terms and conditions of more than 70 Australian banks and found 13 now make it clear that financial abuse is unacceptable customer behaviour which may result in account suspension or closure. A further three banks have disclosed they are working on financial abuse T&Cs which will go live over the next year. The terms apply to products ranging from transaction accounts, personal loans, digital-only banks and safe custody packets.

Ms Fitzpatrick, Founder & Director of Flequity Ventures and Adjunct Associate Professor, UNSW School of Social Sciences, says: “This is globally leading action from Australian banks which directly addresses one of the key drivers of gendered violence. Tens of millions of customers have been told banks won’t condone disrespectful and controlling behaviour, and they’ll change their practices to explicitly forbid and censure it.

“The aim is to change perpetrator behaviour, not de-bank customers. Few people read the fine print of their bank accounts so it will be important for banks to communicate regularly and broadly to increase public awareness. And for the industry to move cautiously, consistently and collectively in order to protect victim-survivor safety and to respond to the inevitable backlash.”

The report was developed to coincide with International Economic Abuse Awareness Day on 26 November 2023, part of the 16 Days of Activism against Gender-Based Violence.

Download the report.

For more information about CWES; https://cwes.org.au

For resources: https://financialsafety.org.au

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