The Victorian Royal Commission into Family Violence report, released in March 2016, made the community much more aware of the prevalence of family violence and acted as a catalyst for us to review our work in this area. On average, one in four women are reported to have experienced family violence in their lifetime.
Family violence can occur in any intimate or other type of family relationship where one person assumes a position of power over another and causes fear. It is important to recognise that family violence involves more than physical violence. Financial abuse – which involves the financial control of another person - is a key factor in family violence and can have devastating and lasting impacts on victims.
Recognising the role the banking industry plays in addressing this issue, the Australian Bankers Association (ABA) released its Industry Guideline: Financial abuse and family and domestic violence policies in November 2016. The Guideline sets out a framework for banks to raise awareness of financial abuse and family violence in their dealings with customers, and promotes consistent arrangements for banks to support their customers who may be impacted by these matters. The Guideline challenges banks to develop and implement policies and procedures to identify and respond to customers’ financial abuse.
We also play a role, considering disputes lodged by people who are victims of family violence and disputes where financial abuse is an issue. In March 2017, we released The FOS Approach to Joint Facilities and Family Violence. This document sets out how we consider disputes featuring financial abuse in the context of family violence and our expectations of our member financial services providers (FSPs) when providing credit or permitting withdrawals, managing joint accounts, assessing requests for financial hardship assistance, and listing credit defaults.
Since late 2016, the FOS Family Violence Working Group (FVWG) has engaged with a range of FSPs to understand their approach to working with customers experiencing family violence, their interpretation of the ABA Guideline, and to obtain their input to the FOS Approach document.
Online survey results
In June 2017, the FVWG sent an online survey to 98 banks, building societies, credit unions and credit providers and 56 general insurers, insurance brokers and underwriting agencies.
We had a 24% response rate from banks, building societies, credit unions and credit providers and a 4% response rate from general insurers.
Our concern is that the relatively low response rate may indicate a lack of awareness among some FSPs of the impact family violence can have on their customers. In addition, of those FSPs who did respond to the survey, most said:
- they rarely identify customers experiencing family violence
- they do not provide information beyond how to apply for financial difficulty assistance
- they are not aware of what support services exist for customers experiencing family violence
- they do not have specific family violence training for staff, and do not intend to introduce training in the future.
The FVWG interviewed a number of large banks and credit unions to find out more about their response to the issue, and the challenges they are facing. This research identified a number of emerging themes:
- Customers are reluctant to self-identify as victims of family violence. Where this information is shared with the FSP, it is often through a financial counsellor.
- Few banks or general insurers have formal processes and procedures in place to guide staff when working with customers experiencing family violence. FSPs reported that they assessed customers’ circumstances and needs on a case-by-case basis and, where possible, provided assistance and support, including referring customers to specialist external agencies. They aim to be flexible in the assistance provided.
- Many FSPs do not provide specialist family violence training for staff, although some provide training for working with vulnerable people more generally.
- Some FSPs will ensure the affected customer only has to deal with one staff member, or a smaller team of staff members who are aware of the issues facing the customer.
- Many FSPs do not ask for evidence of family violence (such as apprehended violence orders made by a court) and act on their customers’ disclosures.
FSPs highlighted a number of challenges they face when providing assistance to customers experiencing (or recovering from) family violence. These include:
- understanding their legal rights and obligations when varying loan contracts and providing hardship assistance to one joint account holder where the other account holder is not engaged in the process
- internal system constraints in physically removing a joint account holder from the facility
- understanding their legal rights and obligations when reporting credit defaults.
Despite some notable challenges, the FVWG is pleased to see that several FSPs have implemented some great initiatives to help customers affected by family violence. For example, one FSP offers customers experiencing family violence grants of up to $2,500 to assist in times of crisis. FSPs have also developed ‘silent accounts’ and protected files to ensure the privacy of family violence victims is maintained.
The initiatives outlined above are an important step in helping victims to regain control of their finances. However, our engagement to date highlights that responding to family violence remains a work in progress across the financial services industry as a whole. There are a number of areas where FSPs have an opportunity to improve their responses. In line with the FOS Approach to Joint Facilities and Family Violence, we encourage FSPs to:
- provide training to staff to help them understand family violence and recognise the warning signs, particularly at the time of lending
- put in place procedures to minimise the number of times a customer needs to disclose their circumstances
- be flexible in their approach to financial hardship, understanding that customers may not have access to their financial records and other documents, and are likely to be experiencing considerable stress
- be aware of, and refer customers to, appropriate support services where possible.
For more information on Family Violence, we have included a number of resources below:
If you would like any further information about the survey results or the activities we are undertaking, please contact Alexia Fink, Chair – FOS Family Violence Working Group by phone on (03) 9613 7347, or via email to email@example.com.