Why economic justice is needed to support victim-survivors of economic abuse with coerced debts

By Genevieve Richardson, Senior Public Policy Advocate

Our latest policy report ‘Too close to home’ explores our debt advice clients’ experiences of coerced debt. As a debt advice charity supporting financially vulnerable people, we wanted to understand the prevalence of coerced debt, both among our clients and nationally, as well as people’s experience of accessing support with their debts, and levels of awareness of coerced debt among victim-survivors and the population at large.

Based on national polling, we estimate that 1.6 million UK adults have experienced coerced debt in the last 12 months, while it affects almost one in eight of our clients. Despite the prevalence of coerced debt, however, awareness is low — our polling indicated that 68% of the adult population had never even heard of the term of coerced debt (Fig.1).

Coerced debts affect women disproportionately, part of a broader issue of domestic abuse and violence against women and girls. Coercive and controlling behaviour is one of many methods abusers use to exploit, sabotage and restrict. And while the abuse devastates the lives of those affected, with trauma lasting long after the victim-survivor has left, if they are able to leave, where coerced debts are involved, there is an added layer of difficulty in that the person who has fled has to find a way to manage often unaffordable debts they accrued through no fault of their own.

What can victim-survivors with coerced debts do?

Our research found that it was common for victim-survivors to pay back their debts. This was often because of a lack of awareness about what other solutions might exist. As some of our debt advisors told us, coerced debts were difficult for victim-survivors to deal with in part because, at a time when they were trying to flee danger and rebuild their lives, their debts were, understandably, not their primary concern.

Legal routes exist, but there may be many reasons why a victim-survivor doesn’t want to or can’t go through the process of a lengthy and costly criminal process, and one which may keep them tethered to their abuser.

Debt advice, forbearance and insolvency bring many positives, relieving some of the immediate pressures that we know problem debt brings and helping stop repayments or reduce them to an affordable level. But these solutions can come with downsides for victim-survivors; they typically involve repaying debts in part or in whole and require a restricted budget, sometimes for extended periods of time.

Victim-survivors can also make requests to their bank or lender for debt write off by explaining what has happened to them. But we heard from our clients that support from firms can be inconsistent and patchy, and decisions about write-off are at the bank or lender’s discretion. Our national polling found that debt write off was not common practice for those with coerced debts, at an estimated 13%. But we know what a positive outcome this can be for people on the receiving end of coerced debts.

For Anita*, having her debts partially written off was a huge relief, and she told us that the process of speaking to her bank was positive. She had £25,000 of her £52,000 worth of debts written off, and she has been given forbearance on her mortgage arrears. As she dealt (and continues to deal) with the trauma of the abuse she experienced, where her abuser served a prison sentence for attempting to kill her, having repayment and collections paused was a huge help. But there is still more that could be done for people like Anita*, and we don’t think that victim-survivors should have to be at all responsible for these debts.

Even where a debt solution is found, or where debts are written off, these options still usually carry with them negative impacts on a credit record. This was one of the biggest sources of frustration for the clients with whom we spoke who, at a time when they were trying to rebuild their lives, found themselves financially excluded.

For Adam*, who told us there were seven defaults on his credit record, the mental toll became unmanageable, and he found he couldn’t access various vital products and services and even barred from certain employment opportunities.

“[It’s] looming over my head, and it really stresses me out. I can’t even take out a mobile phone contract, my credit score’s that bad. Even if I was working a job, I wouldn’t be able to finance a car. Say I have my own home and the cooker breaks down, or the fridge breaks down, I wouldn’t be able to take it out on a 12-month, interest free plan. All these options have been taken away from me.”
Adam*

Why economic justice is key to supporting victim-survivors

Debt write-off goes a long way to providing a solution to a victim-survivor’s debts, lifting a massive weight from their shoulders, but is not the norm for most victim-survivors. And write off remains an incomplete answer without accompanying credit file restitution.

StepChange, alongside Surviving Economic Abuse and UK Finance, is calling on the Government to establish a cross-department economic abuse taskforce, led by HM Treasury and the Home Office, to address the barriers to economic justice for victim-survivors with coerced debts. We believe the solution lies in ensuring victim-survivors are, as far as possible, supported to be put back in the economic and financial position they would have been had the abuse never happened and, crucially, that they do not have to pay the price for their abuser’s behaviour.

*Names have been changed.