Financial Abuse Code_0

Key Take Aways

1. The incidence of economic abuse has risen significantly, with the number of women impacted increasing from 2.3 million to 4.1 million over four years, underscoring a critical need for targeted intervention.
2. The financial sector can play a pivotal role in combating domestic abuse by supporting victim-survivors through industry-specific codes and collaborative initiatives.
3. The Financial Abuse Code serves as a central industry framework, underpinning efforts to enhance understanding, support, and protection for victims within financial services.
4. The third iteration of the Code has been aligned with the FCA’s Consumer Duty, emphasising good customer outcomes, vulnerability support, and tailored responses to diverse needs.
5. The revised Code explicitly recognises unique vulnerabilities among groups such as disabled women and racially marginalised women, advocating for culturally sensitive and accessible support.
6. Industry collaboration with charities like Surviving Economic Abuse and Refuge has enriched the Code, fostering best practice responses and information-sharing tools like the Economic Abuse Evidence Form.
7. The industry is encouraged to promote early disclosure by customers, supporting safe access to funds, sensitive communication, and mechanisms that minimise distress.
8. Product and service design standards now incorporate considerations for victims, including flexible support methods and inclusive identity documentation.
9. The revised Code introduces a structured seven-pillar framework, aligned with regulatory standards, to guide firms in recognising, responding to, and preventing economic abuse.
10. Training is vital; firms are advised to equip staff with a thorough understanding of abuse signs, vulnerable demographics, and effective, empathetic responses.
11. External education campaigns and awareness-building are integral, aiming to inform customers about available support and how they can disclose abuse safely.
12. Continuous improvement processes, including ongoing review and monitoring, are essential to adapt support strategies and uphold regulatory compliance and victim-centric outcomes.

Key Statistics

• The number of adults suffering domestic abuse increased from 2.3 million to 4.1 million women within four years (ONS, Surviving Economic Abuse 2024).
• Women experiencing economic abuse include disproportionately disabled women and Black, Asian, and racially marginalised women, who are twice as likely to be affected compared to their non-disabled and White counterparts.

Key Discussion Points

• The rising prevalence of economic abuse highlights the urgent need for systemic industry and government interventions.
• The role of the financial sector is central to supporting victim-survivors through the implementation and regular review of the Financial Abuse Code.
• The Code’s alignment with FCA’s Consumer Duty underscores a shift toward prioritising customer outcomes and vulnerability support.
• Recognition of diverse victim groups necessitates tailored, culturally sensitive responses within financial institutions.
• Industry collaboration with charities enhances practical support tools and evidence-sharing initiatives, improving early disclosure and safety.
• Financial institutions should foster environments that encourage disclosure while safeguarding privacy and dignity.
• The importance of training staff on recognising signs of abuse and understanding the specific needs of at-risk demographics.
• Product design must consider needs impacted by abuse, including flexible access and inclusive documentation.
• The industry has made progress by establishing specialised teams and support services, such as the Lloyds’ Domestic and Financial Abuse team.
• There is ongoing emphasis on raising awareness among customers through accessible information campaigns.
• The regulatory landscape, including the Domestic Abuse Act 2021 and FCA’s guidance, continues to evolve, demanding adaptive strategies.
• Collaboration with governmental and external stakeholders, including police and safeguarding authorities, remains critical to disrupting abuse and fostering safety.

Document Description

This article presents an in-depth overview of the updated Financial Abuse Code, a industry-led framework designed to enhance support and protection for victims of financial and economic abuse. It details the background, key principles, and structured pillars guiding firms in recognising, responding to, and preventing abuse, aligned with evolving regulatory standards such as the FCA’s Consumer Duty. The document underscores the importance of cross-sector collaboration, tailored support for diverse victim groups, and continuous improvement measures to ensure effective outcomes within the financial services sector.