How to Protect Yourself Against Financial Coercion

When someone else controls your money and finances, you are likely a victim of financial coercion. The forms such coercion takes are often disguised or presented under the guise of something else - and can come from strangers, friends and family members. With that in mind, we have put together this essential guide to understanding financial coercion and what you can do to protect yourself.

Financial coercion is a growing threat that affects thousands of people each year. It is often disguised as a legitimate opportunity or through the establishment of a relationship. Unlike obvious fraud schemes, financial coercion operates through psychological manipulation, gradually drawing victims into situations where they unknowingly become tools in criminal enterprises.

At Guavapay, we recognise that financial crime doesn't just target our systems – it targets our customers. That's why we are committed to empowering people with the knowledge they need to protect themselves.

What Is Financial Coercion?

Financial coercion occurs when someone manipulates, pressures or deceives another person into handling money or opening financial accounts on their behalf. The coercer typically builds trust first, then gradually escalates their requests, making each step seem reasonable while moving toward their ultimate goal.

This manipulation takes many forms, but the core element remains consistent: the victim believes they are acting voluntarily while actually being controlled by someone with criminal intent. The scale of this problem is significant: 16% of adults in the UK say that they have experienced economic abuse.

Given the prevalence of this issue, resources have been developed to help professionals identify and support victims. For those working in financial services or debt recovery, the UK government has developed a comprehensive Economic Abuse Toolkit, which provides detailed guidance on identifying and supporting victims of economic abuse. This resource offers practical screening questions, disclosure techniques and signposting information for professional use.

Common Scenarios: How It Happens

Employment Scams

With remote work becoming mainstream, employment scams have evolved to exploit the digital-first hiring processes that many job seekers now navigate. Fraudsters pose as legitimate employers offering attractive positions. They may conduct fake interviews, provide official-looking contracts and even pay initial ‘wages’ to build credibility. Once trust is established, they might ask employees to handle financial transactions as part of their duties, such as:

• Opening business accounts
• Receiving and forwarding payments
• Converting currencies or transferring funds internationally
• Processing refunds or handling customer payments

Romance Scams with Financial Elements

Relationships can evolve into romantic scams and financial manipulation when the partner begins requesting financial favours. They might claim to be travelling, facing emergencies or needing help with business transactions. The emotional connection makes victims more willing to assist, often leading to:

• Sending money directly
• Receiving and forwarding funds
• Opening accounts in their name for the partner's use
• Taking out loans or credit on the partner's behalf

The impact on relationships is profound: one in six women in the UK has experienced financial abuse in a current or former relationship, highlighting how financial control can become a tool for broader domestic abuse.

Family or Friend Exploitation

Sometimes financial coercion comes from people we know. A family member, friend or acquaintance might pressure someone into financial arrangements, exploiting existing relationships and trust. This can involve:

• Using someone's good credit to open accounts
• Pressuring vulnerable individuals to sign documents
• Manipulating elderly relatives or those with cognitive challenges
• Exploiting those in financial distress with promises of profit

Elder Financial Abuse

The elderly are particularly vulnerable to financial coercion and are often targeted by both strangers and their own family members. This abuse can include adult children taking control of a parent's finances, carers manipulating elderly clients into changing wills or giving them money, or scammers specifically targeting older people with sophisticated telephone or online fraud.

The emotional manipulation often involves creating urgency ("You need to act now to help your grandchild") or exploiting trust and respect for authority figures.

The Psychology Behind the Control

Financial coercers are skilled manipulators who understand human psychology. They typically follow a predictable pattern:

1. Building Trust: Initial interactions focus on establishing credibility and emotional connection. Scammers may invest weeks or months in this phase.
2. Gradual Escalation: Requests start small and reasonable, then progressively increase. Each compliance makes the next request seem less unusual.
3. Creating Urgency: Coercers manufacture time pressure, claiming immediate action is necessary to avoid missing opportunities or facing consequences.
4. Isolation and Dependency: They may discourage victims from discussing arrangements with others, claiming confidentiality requirements or creating fear of losing the opportunity.
5. Exploiting Vulnerabilities: Whether financial stress, loneliness or desire for employment, coercers identify and exploit personal vulnerabilities.

Warning Signs: When to Be Concerned

Several red flags should immediately raise concerns about potential financial coercion. If you find yourself in any of the situations listed below, take a step back and consider whether you might be being manipulated:

• Secrecy Requirements: If someone tells you not to discuss financial arrangements with family, friends or financial advisers, this is a major warning sign. Legitimate opportunities can withstand scrutiny from trusted people in your life.
• Rushed Decisions: Do you feel pressured to open accounts, sign documents or transfer money immediately without time for consideration? Legitimate employers and partners will give you time to think through important financial decisions.
• Complex Explanations: Are you receiving overly complicated justifications for why you need to handle someone else's money or open accounts on their behalf? If you cannot easily explain the arrangement to a friend, it is likely problematic.
• Geographic Disconnects: Have you been asked to make international transfers, especially to countries you have no connection to? Question why your involvement is necessary for transactions to distant locations.
• Technology Barriers: Are you being asked to use unfamiliar payment methods, cryptocurrency or international transfer services? Legitimate businesses typically use standard, recognisable payment systems.
• Document Requests: Has someone asked for copies of your identification, bank statements, or other personal financial information? Consider why they need these details and what they could do with them.

Protecting Yourself: Practical Steps

The consequences of financial coercion extend far beyond immediate financial loss, which is why it is essential to exercise extreme caution.

• Question Everything: If someone asks you to handle their money, open accounts on their behalf or engage in financial transactions, ask yourself why they cannot do it themselves.
• Verify Independently: Research companies, check employment opportunities through official channels and verify romantic interests through video calls and social media investigation.
• Consult Others: Discuss any unusual financial requests with trusted family members, friends or financial advisers before taking action.
• Protect Your Credit: Be extremely cautious about taking on debt at someone else's request. 60% of victim-survivors of coercive control have been coerced into taking out debt, which can take many years to repay and impacts credit ratings, creating long-term financial instability even after escaping the abusive situation. Never sign loan agreements, credit applications or financial documents under pressure or without fully understanding the terms.
• Trust Your Instincts: If something feels wrong or too good to be true, it probably is.
• Know the Questions: Before opening any account, ask yourself (and answer honestly): "Am I opening this account under someone else's instructions or for someone else's benefit?"

When Coercion Happens: Taking Action

If you suspect you're being financially coerced:

1. Stop all transactions immediately
2. Document everything - save communications, transaction records and account information
3. Contact your financial institution to report suspicious activity
4. Report to authorities - contact local police and any relevant regulatory bodies
5. Seek support - financial counsellors and victim support services can help with recovery

Moving Forward: Building Financial Resilience

Financial coercion thrives on isolation and a lack of awareness. By understanding these schemes and maintaining open communication about financial decisions, we can protect ourselves and our communities. Remember that legitimate employers, romantic partners and business associates will never pressure you into secretive financial arrangements or rush you into decisions involving your money or credit.

Your financial autonomy is precious. Guard it carefully, question unusual requests and never hesitate to seek advice when someone else wants control over your financial life. In an increasingly connected world, staying informed and vigilant is your best defence against those who would exploit your trust for criminal gain.