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EACH and CommBank tackle financial abuse in SMEs

EACH, in collaboration with CommBank, spearheads an initiative to expose and combat financial abuse within SMEs. Financial abuse in the business realm is a severe form of family violence, often occurring concurrently with verbal or physical abuse.

Financial abuse within the business realm is a grave manifestation of family violence involving the exertion of power to regulate, exploit, or sabotage a partner within a business context. Research conducted by Deloitte Access Economics for the Commonwealth Bank has unveiled the alarming scale of financial abuse in Australia, affecting over 600,000 individuals and costing the economy a staggering $10 billion annually. However, statistics regarding the prevalence of financial abuse within businesses remain elusive. Given that family businesses constitute 67 percent of all Australian businesses, the risks extend significantly to numerous families. EACH’s project aims to fill this knowledge gap, conducting studies that quantify the numbers and values associated with this hidden problem.

In a pivotal move, not-for-profit organization EACH has been chosen as a CommBank Next Chapter Innovation Partner, signifying a commitment to combatting financial abuse within Australian small businesses. Despite being a powerful mechanism for keeping victims trapped, financial abuse within small businesses continues to evade mainstream attention and support, highlighting the critical need for recognition and action within consumer protections, tax, and corporate legislation. The shared experiences of victims, from coercive directorship to business sabotage, emphasize the urgency of establishing effective pathways for resolution and justice.

Unveiling Financial Abuse in Small Businesses: Financial abuse within the business realm is a concealed yet serious facet of family violence, characterized by the misuse of power to control, regulate, or sabotage a partner. EACH, in partnership with CommBank, seeks to unravel the complexities of this abuse and offer solutions to those affected.

Real-Life Experiences Exposed: Based on the lived experiences of EACH clients, instances of financial abuse in small businesses have emerged in various forms. Examples include individuals being forced into directorship without consent, compelled personal guarantees for business loans, and coerced use of personal credit for business purposes. Such abuses often involve the misuse of regulatory bodies and financial institutions.

Impacts of Financial Abuse: Financial abuse is a potent tool for abusers to maintain control over victims, leading to multifaceted consequences. Victims find themselves having to prove innocence at a personal cost, facing prolonged resolution periods, and dealing with unwarranted debt repayment that may result in bankruptcy. The impacts extend to impaired credit reports affecting various aspects of life and the potential collapse of sabotaged businesses.

EACH’s Proactive Response: EACH, with its established history of supporting victims of financial abuse, recognizes the urgency to address this specific form of abuse within small businesses. The collaboration with CommBank aims to create a national response, providing specialized support for victims. The current legal and regulatory framework often fails to adequately address instances of financial violence.

Statistics and Future Studies: Deloitte Access Economics’ research reveals the widespread impact of financial abuse on individuals and the economy, estimating that over 600,000 people in Australia have experienced financial abuse in the past year. However, limited research exists on financial abuse within small businesses, despite family businesses constituting a significant portion of Australia’s business landscape. EACH’s project seeks to fill this gap, conducting studies that quantify the prevalence and value of this type of abuse.

The Next Chapter Innovation Think Tank, hosted at CommBank’s South Eveleigh offices, brought together the five selected community organizations, key executives, and subject matter experts from various bank divisions, including retail, HR, business banking, strategy, marketing, and community investment. Each organization chosen as an Innovation Partner will benefit from mentorship provided by a senior leader from the bank.

This mentorship, spanning the next 12 months, aims to offer sustained support and expertise, empowering these organizations to make a lasting impact through their programs. Sian Lewis, CBA Group Executive for Human Resources, emphasized the significance of CommBank’s Next Chapter Innovation program. It leverages the bank’s expertise in incubating and delivering innovation to offer practical support, accelerating action for community organizations dedicated to addressing financial abuse within the context of domestic and family violence.

CommBank is committed to sharing its resources with not-for-profit organizations, making available expertise that might otherwise be inaccessible to them. The mentorship, support, and collaborative think tank approach are designed to bring meaningful projects to life, significantly impacting the lives of many individuals affected by domestic and financial abuse.

The five Next Chapter Innovation Partners and their respective initiatives are:

YFS LTD: Providing services in Logan and Scenic Rim, YFS Ltd will develop and trial practical ways to raise awareness about technology-facilitated abuse, including hosting ‘bring your device’ sessions, capacity-building sessions, and security upgrades for those impacted by domestic violence and financial abuse.

Indian (Sub-Cont) Crisis and Support Agency (ICSA): Dedicated to vulnerable South Asian communities, ICSA will address the issue of dowry abuse, developing guidelines and tailored sessions for the community, legal sector, domestic violence sector, and frontline workers.

EACH: A for-purpose organization delivering health and support services, EACH will commission a report to inform the development of a national ‘domestic and family violence in small business’ resolution service.

Afghan Women on the Move: Supporting Afghan and multicultural women in Australia, this organization seeks to address the nuanced challenges of domestic violence and financial abuse within the multicultural community by providing language-targeted content and therapeutic art workshops.

Illawarra Women’s Health Centre: Through the Illawarra Women’s Recovery Centre, opening in 2024, this center will co-design a ‘Pathways to Financial Security Framework’ to define financial security from a lived experience perspective after experiencing domestic and financial abuse.

Lula Dembele, Director Lived Expertise & Advocacy at Illawarra Women’s Health Centre, expressed enthusiasm about the partnership, stating, “We are thrilled to be partnering with CBA through Next Chapter Innovation to help create a way forward for women to re-establish financial security following financial abuse.”

The Next Chapter Innovation initiative, launched in July 2023, offered eligible not-for-profit and social enterprise organizations access to grants ranging from $50,000 to $200,000, dedicated executive support and mentoring from CommBank, and access to a think tank to leverage corporate expertise.

For further details on CommBank Next Chapter, visit: commbank.com.au/nextchapter

Anyone worried about their finances because of domestic or family violence or coercive control can contact the Next Chapter Team on 1800 222 387 for support – no matter who they bank with.

If you or someone you know is experiencing domestic or family violence, call 1800RESPECT (1800 737 732) or visit www.1800RESPECT.org.au.

In an emergency or if you’re not feeling safe, always call 000.

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