BNZ and other lenders waive debts incurred in abusive relationships

The Bank of New Zealand and some other lenders have written off the debts of victims of economic abuse.

Economic abuse, and the economic harm it causes, is, as TUE keynote speaker Ayesha Scott called it, “the use of money” by an intimate partner.

Victim-survivor advocates said economic abuse could include various methods of control, but often included male partners or relatives of a woman forcing her to take out loans on his behalf for their benefit.

Women, and less often men, who have suffered economic abuse, have often found that the consequences of that abuse linger long after they’ve slipped out of the relationship as they grapple with damaged credit scores and bad credit ratings. debts that they had to repay on their own, the lawyers argue.

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BNZ is the first of the big banks to publicly declare that it sometimes waives the debts of victims-survivors of economic abuse.

Chris McKeen / Stuff

BNZ is the first of the big banks to publicly declare that it sometimes waives the debts of victims-survivors of economic abuse.

But economic damage experts speaking at the Economic Damage Awareness Day webinar on Friday said some lenders were moved by stories of economic abuse to simply write off the debts of victim-survivors.

Jake Lilley, policy manager at financial mentoring agency Fincap, said: “The best examples I’ve seen of a company finding out that debt is the result of economic harm is simply giving up the debt. debt.”

The waivers allowed victims of abuse and economic harm to get out of “impossible situations” where they had debts they could not hope to repay without significant hardship, he said.

“We are advocating for debt cancellation as a way for people to move forward,” Lilley said.

“We did it,” said Martin King, general manager of customer support at BNZ.

It was only used in some complex cases and came in after the bank worked with financial mentors and other victim-survivor advocates, King said.

Few banks, electricity providers and other large corporations had specific policies on domestic violence, the webinar was told.

Instead, people who had suffered economic abuse from a partner or family member were typically treated through traditional “hardship” processes, which all lenders and companies do. electricity must legally have.

Lilley said that when creating policies of economic abuse, companies need to understand how traumatized people can be. This could mean that companies accept that they have to accept lower levels of evidence than they might in other difficult cases.

“Take people at their word about their experience, so that they don’t have to repeat a horrible experience over and over again in their lives and move on,” he said.

Debt exemptions had been made by working with client assistance agencies, including Good Shepherd, which hosted the seminar.

Internationally, debtor advocacy groups, including Good Shepherd, have worked to raise the profile of economic abuse and economic damage.

Economic abuse is an unrecognized form of domestic violence, says Nicola Eccleton, head of social inclusion at Good Shepherd, and economic harm is the result of that abuse.

A recent study from the University of Auckland suggested that it was on the rise, perhaps because people who mistreat their partners might view it as a low-risk abuse option, as it was rarely prosecuted or acknowledged. .

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