New research by StepChange Debt Charity reveals the long-term and harmful impact that coerced debt can have on someone’s credit record, in many cases preventing them from securing a home, finance agreement, or even employment opportunities.
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. It may impair someone’s credit file where these debts lead to missed payments, defaults or CCJs. Coerced debt affects an estimated 3% of UK adults – around 1.6 million people.
Around half (48%) of UK adults who have experienced coerced debt had at least one negative impact on their credit record, such as a dip in their score, default, or CCJ.
Around third (35%) said that they were declined for at least one financial product or service, such as a loan or credit card, internet or mobile contract, or a tenancy, mortgage or job, due to problems with their credit rating.
Previous research from the Surviving Economic Abuse (SEA) charity also found that one in eight UK women who held a joint mortgage in the last two years experienced joint mortgage economic abuse from a current or former partner – equivalent to over 750,000 people.
Despite the unrelenting impact of coerced debt on someone’s finances, the new figures show seven in ten (70%) victim-survivors did not seek help with their coerced debts. For many this was due to a fear of judgement - almost half (45%) of this group said this was due to shame and embarrassment, and 30% said they did not know what help was available.
The government recently supported a joint industry-sector initiative to improve the way coerced debt is reflected on victim-survivors’ credit files, and StepChange says this must translate into a detailed plan and a concrete timetable as soon as possible.
Vikki Brownridge, chief executive at StepChange Debt Charity, said: “People who have experienced coerced debt are often left with ruined credit records. The knock-on effects can make it much harder to access affordable credit, essential products and services, housing, and even employment opportunities. This leaves people who have faced abuse finding themselves with even more barriers to leaving abusers and rebuilding their lives.
“This is an underreported and not widely understood issue by the general public, and it’s concerning that there could be millions of victim-survivors out there who aren’t seeking help due to stigma, or a lack of awareness of support.
“Impactful, positive outcomes can be achieved for people who’ve experienced coerced debt and economic abuse. Our evidence shows the importance of government leading multiple sectors to work together to undo the financial harm victim-survivors face.”
Sam Smethers, chief executive of Surviving Economic Abuse, commented: “For far too long, victim-survivors have been left paying the price for domestic abusers’ coerced debt. We welcome StepChange’s work shining a light on this issue and the fact that coerced debt puts survivors at risk of homelessness, destitution, and poor credit scores. The impact is felt disproportionately by women, particularly mothers, disabled women, and those who are racially marginalised. Yet far too few seek help, and many face long-term financial exclusion that prevents them from safely rebuilding their lives.
“We’re pleased the government has committed to improving how coerced debt is reflected on credit files. We are now working alongside government and industry to develop a survivor-centred, trauma-informed solution that must be consistently implemented – and go further. Consistent, good practice responses to coerced debt across the public and private sectors are critical for survivors to achieve safety and freedom.”
