Coerced debt is a form of economic abuse where the perpetrator coerces a victim into debt; for example, by making them take out credit against their wishes.
According to StepChange, about 3% of UK adults, equivalent to 1.6 million people, have experienced coerced debt, with about one in eight (12%) of the charity’s debt advice clients impacted by it.
A report by the charity entitled Too close to home: StepChange debt advice clients’ experiences of coerced debt examines how patchy and inconsistent support, legislative barriers, and inflexibilities in credit reporting prevent victim-survivors from rebuilding their lives and regaining economic stability.
StepChange is calling for the Government to establish a task force to ensure victim-survivors can achieve economic justice through economic safety and stability without having to pay the price for an abuser’s behaviour.
Currently, victim-survivors face years repaying coerced debt, extending the impact of abuse and tying victims to a perpetrator. Research has found that often victim-survivors struggle to make ends meet due to debt repayments, experience financial exclusion due to negative impacts on their credit report and, in some cases, are barred from working in certain jobs.
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National YouGov polling commissioned by StepChange for the report reveals low public awareness of coerced debt and economic abuse. The poll found that almost seven in 10 (68%) people have never heard of the term ‘coerced debt’.
The research also uncovered inconsistencies in the quality and level of support for people experiencing coerced debt. Key problems identified are a lack of specialist knowledge and compassion. Debt write-off is crucial for victim-survivors with coerced debt wherever possible, yet it remains rare, in part due to barriers to separating joint debts.
StepChange is joining organisations such as Surviving Economic Abuse, Refuge and UK Finance in calling for a cross-Government economic abuse task force to lead change.
Vikki Brownridge, CEO of StepChange Debt Charity, said: “Those who have experienced coerced debt should not pay the price for their abuser’s behaviour. Yet restoring a victim-survivor’s finances can be a long and complex process, particularly in the case of joint debts and joint mortgages. The challenge of dealing with debts that have been coerced is compounded by the emotional and mental health impacts of abuse.
“Our research highlights the urgent need for Government leadership and a collaborative approach from regulators, financial services and advice agencies in supporting victim-survivors to regain financial control and ensure they do not spend years paying back coerced debts. A more consistent approach to debt write-off and credit file restoration are two key recommendations that would help to achieve this.”
Sam Smethers, interim CEO of Surviving Economic Abuse, said: “StepChange’s report paints a stark picture of how widespread and devastating coerced debt is. We hear time and time again that abusers are leaving victim-survivors drowning in debt, making it impossible for them to rebuild their lives and provide for their children. Often survivors are forced to rely on food banks to feed their families and many are left with destroyed credit ratings for years to come.
“Victim-survivors should not have to pay for abusers’ crimes. We want to see their debts cleared and their credit ratings restored. That’s why we, alongside StepChange, are urging the Government to set up a cross-Government task force on economic abuse to agree on solutions to coerced debt and credit restoration. It’s the only way to help survivors and their children escape and safely rebuild their lives.”
