The National Australia Bank (NAB) has assured customers that its new regulations surrounding financial abuse will not be open to misuse following the announcement of the new rules.
On June 26, NAB announced it would be updating its terms and conditions to allow the bank to financially ‘cut off’ customers who’ve been identified as perpetrators of financial abuse.
The new condition, which is covered under ‘unacceptable account conduct,’ warns customers that if they are identified as engaging in financial abuse, the bank can suspend, cancel or deny them access to their savings and transaction accounts.
However, concerns have been raised that the new conditions could be taken advantage of by individuals making false claims to punish another individual.
But NAB’s Head of Customer Vulnerability, Michael Chambers, told The Epoch Times that the bank would be conducting detailed investigations into any claim via a specialist customer care team, who are well-trained to make the necessary enquiries to ensure customers are safe.
“As part of the detailed investigation, we will look at transaction data, speak with the recipient of the suspected financial abuse and speak with the alleged perpetrator before we take any action,” Mr. Chambers said.
“If we believe financial abuse is occurring, the perpetrator will receive a warning letter, and if their behaviour persists, we will take the appropriate action to alter, suspend or terminate services to them.”
Mr. Chambers noted that the bank had a duty of care to its vulnerable customers, who may be older, with disability, illness or cognitive impairment, or experiencing family violence or domestic abuse.
“Financial abuse takes many forms,” he said.
“It can occur in family-based relationships by forcing a family member to go guarantor on a secured loan or pressuring family members to lend money without intention to pay it back; in caregiving scenarios, where a relative or carer has access to another person’s funds and misuses them for their own purposes; or as a form of coercive control to prevent a Victim Survivor of domestic abuse from achieving financial independence.
“This change aims to stop financial abuse from occurring, be it related to family violence, elder financial abuse or domestic abuse.”
The changes to the terms and conditions are set to come into effect in November 2023 and have been formulated with help from the paper ‘Designed to Disrupt,’ authored by Catherine Fitzpatrick, founder of Flequity Ventures, and supported by the Centre for Women’s Economic Safety.
The NAB crackdown on financial abuse follows the bank’s decision in January to block abusive messages sent via payment transactions.
Currently, the bank says it has blocked more than 200,000 abusive transactions using technology that searches for keywords and phrases.
The move by the NAB brings it in line with the Commonwealth Bank of Australia (CBA), which since 2020 has been working on countering financial abuse under its Next Chapter program.
According to the bank, CommBank Next Chapter is a bank-wide commitment to help end financial abuse and support people on their road to long-term financial independence.
Launched in 2020, the scheme notes that in a survey commissioned by the CBA in 2020, of almost 2,000 Australians aged over 65, 28 percent have said that they have experienced financial abuse or know someone who has.
Of those experiencing financial abuse, 52 percent said they thought they could deal with the financial abuse on their own.
Research (pdf) conducted by Deloitte and commissioned by CBA estimates that in 2020 the direct cost of financial abuse to victims was $5.7 billion (US$3.89 billion), with an estimated additional cost to the broader Australian economy of $5.2 billion.
The decision by the NAB and the CBA has received mixed reviews, with advocates from the Centre for Women’s Economic Safety (CWES) stating the new banking terms and conditions were a significant step in making it clear financial abuse of female domestic abuse victims should not be tolerated.
Rebecca Glenn, CEO of CWES, said the response puts perpetrators ‘on notice’ that institutions are going to make it harder for them to use financial abuse as a tactic of coercive control.
“Few other businesses are better placed to protect women against financial abuse and its devastating health and economic impacts for them and their children,” she said.
“I’m delighted to see the Commonwealth Bank and NAB build on a range of other initiatives they’ve put in place to support people experiencing financial abuse and domestic and family violence.”
However, Bettina Arndt from the Men’s Rights Agency has criticised the move.
She is concerned that the bank’s investigators may be prone to bias and will focus solely on males as perpetrators.
“Psychologists at the University of Central Lancashire, who carried out the major research available on male victims of coercive control, report financial abuse was a major issue for many of these men: ‘Half of male victims had their earnings controlled as a pattern of abuse which in some cases led to men not being able to purchase food or clothing. Men were also expected to take on the burden of all household finances as almost two-thirds of the female perpetrators refused to contribute to household bills and over half refused to work even if able to,'” Ms. Arndt wrote in a recent blogpost.