The True Cost of Domestic Violence

Signs of trouble began to surface from the beginning of their 15-year marriage—he tried to control her schedule, her spending and her every move—but Martha said she only decided to separate from her husband about four years ago, when he began to use his tactics of intimidation on their children. About a year ago, when her son’s social worker referred her to a counseling program at the nonprofit organization Children’s Aid Society, she began to understand what she was dealing with.

“My counselor said, ‘This is a form of domestic violence’—it hit me like a smack in the face. It doesn’t have to be physical,” said Martha, a 47-year-old New York City resident who asked to be identified only by her first name to protect her privacy. “It’s given me a lot of insight.”

Now, as she is trying to divorce her husband and provide for two children on her own, Martha said she is starting to feel the economic strain. She has amassed about $17,000 in credit card debt, she was nearly evicted from her apartment and—despite working full-time and watching her spending—is barely making ends meet. She is also beginning to understand all the subtle ways in which her husband had steered finances all along—by asking her to charge a costly medical bill on her own credit card, keeping track of her purchases and saving his own money in a secret bank account.

Social services professionals who work with victims of economic abuse in New York City say this type of domestic violence is little understood and poorly documented. But the consequences of financial sabotage—tactics of which include controlling a partner’s access to money, preventing them from working or attending school, ruining their credit and stealing their identity—can be more damaging than people realize, often sending victims on a downward spiral of unemployment, homelessness and bankruptcy.

“Victims of domestic violence—what happens to them is not a snapshot in time,” said Gwen Wright, executive director of the New York State Office for the Prevention of Domestic Violence. “We’re talking about a long video.”

But so far there does not seem to be a comprehensive national or local study—at least in New York—measuring the ripple effect of domestic abuse on the economy, including how it impacts employers and the healthcare system. A handful of studies look at pieces of the problem, but some experts say it would be helpful to connect the dots—however complicated this may be.   

Nationwide, the cost of domestic violence is more than $5.8 billion per year, which includes about $4.1 billion in healthcare services and about $0.9 billion in lost productivity at work, according to a 2003 study released by the Centers for Disease Control and Prevention. In 2012, a study by the office of then-Manhattan Borough President Scott Stringer found that while victims of economic abuse often receive assistance for short-term needs such as housing and childcare – this support net tends to disappear in the long term.

"We must end the cycle of economic abuse in our city and in our society," New York City Comptroller Scott Stringer said in a statement. "Local government can and should play a role in developing the tools to provide safeguards against economic abuse, and to help lift up victims in recovery."

Research shows that the ramifications of economic abuse can haunt victims long after the abusive partner is gone and their immediate needs are met. 

“That impact of trying to rebuild your life financially, of trying to rebuild your credit, can take years,” said Amanda Stylianou, director of research and evaluation at the New York City branch of Safe Horizon. “The number one thing I hear is the impact it has on (victims’) ability to provide for their children.”

Stylianou said a 2012 study she co-authored found that women who experienced economic and psychological abuse from a domestic partner were more likely to suffer from depression and to spank their children five years later compared to women who had experienced only physical abuse.

“Economic abuse is one of the primary tactics that abusers use to maintain control over their partner,” said Kerry Moles, who oversees domestic violence programs at Children’s Aid Society. Sometimes an abusive partner will harass a wife or girlfriend at work, causing her to be late, affecting her performance on the job and sometimes getting her fired. Moles said the abuser’s goal is to isolate the victim – who ends up having nowhere to go when she tries to leave the relationship.

When victims of abuse do leave and end up in the city’s domestic violence shelters – which are separate from homeless shelters – they can only stay for a few weeks because space is limited.

“There’s this huge linkage between homelessness and domestic violence,” said Catherine Trapani, housing link director at New Destiny Housing. For victims who do not have the resources to move out on their own, the question becomes, ‘Do I stay in this abusive relationship where I have a roof over my head, or do I become homeless?’”

This economic trap is part of the reason why women – who represent the overwhelming number of economic abuse victims – end up staying with a partner, social services professionals said. But they stressed that economic abuse is a problem that also occurs in same-sex relationships and across socio-economic and cultural lines. 

When clients arrive at a New Destiny Housing center, Trapani said they are often unaware of how deep the financial damage runs. The problems usually show up when staff run a credit report.

One pattern that pops up over and over in these situations is that “all of the assets always tend to be in the abuser’s name and all of the liabilities tend to be in the victim’s name,” Trapani said. “That person can choose to pay or not, and they can ruin your credit.”

Because credit problems can have such a debilitating effect on someone’s ability to be financially independent, Trapani and other social services agency professionals said one piece of legislation that could prove helpful is the Consumer Credit Fairness Act which passed the NYS Assembly in 2013 and 2014, and has been introduced in this session but not yet voted on. The bill has never been voted on in the Senate, though Sen. Jose Peralta has introduced it.

Sponsored by Assemblywoman Helene Weinstein, the bill would essentially slow down the debt collection process, said Laura Russell, supervising attorney for the domestic violence unit at the Legal Aid Society. It would require collection agencies to give consumers more information on their debts, more notice and more time to get their finances in order, which would help ease the burden on victims of economic abuse.

Russell said she has worked with victims of domestic violence for the past 20 years, but she began to see the consequences of economic abuse take hold after the recession in 2008, when credit lines tightened, financial assets depreciated, the housing market crashed and public assistance became more difficult to access.

“This recession was much worse for domestic violence survivors,” Russell said. “It’s the whole strangulation of access to credit.”

But Russell said it would be difficult to determine the precise impact of economic abuse – particularly where credit problems are concerned – because not many victims choose to self-identify.

Though the Consumer Credit Fairness Act is having trouble becoming law, New York State Attorney General Eric Schneiderman announced a consumer protection settlement this March that could make all the difference or victims of economic abuse.

By partnering with three of the nation’s leading credit reporting agencies that provide credit information on 200 million Americans – Experian Information Solutions, Inc.,  Equifax Information Services, LLC, and TransUnion LLC – the Office of the Attorney General helped implement two key reforms.

“One big change is that the credit reporting agencies will notify a consumer 180 days before adding medical debt to their report,” said Matt Mittenthal, spokesperson for the Attorney General. “Even if an individual has medical debt, once they’ve resolved it, it will be completely removed from their credit report.”

The Attorney General’s settlement also increases the credit reporting firms’ documentation analysis, layering in another level of review and communication that can potentially prevent devastating credit issues for victims of economic abuse.

“In the past, the credit reporting firm would take information from the creditor at face value,” explained Mittenthal. “So if a creditor – the agencies that these reporting firms work with – said that a consumer has debt, the firm wouldn’t investigate further.”

This lack of additional inquiry meant that individuals would automatically receive a reduced credit rating.

“[Under the Attorney General’s settlement] the credit reporting firms have agreed to employ specially trained staff to review all documentation submitted by consumers who the firms believe have problems with their credit,” said Mittenthal. “[After reviewing the documentation] the credit reporting firm will use their discretion to resolve the dispute.”

A comprehensive report on the economic impact that domestic abuse has on New York State has not been authored.

“There’s not necessarily concrete solutions,” said Stylianou of Safe Horizon, but added that a study on the financial consequences of economic abuse would be “an important next step.”

“Economic abuse is something that impacts all of us,” she said. 

An original version of this story ran in New York Nonprofit Media, a City & State partner publication.