Financial abuse in business

Bankruptcy shock

A week later, Christine received a court notice from creditors petitioning for her bankruptcy in eight days.

Alarm bells rang.

Distraught at the prospect of losing her home, Christine contacted Each’s small business financial counselling service for help. After exhaustive investigation, they discovered $9.8 million of debt in her name across 20 agreements as a guarantor or borrower; and $12 million financial abuse in total.

Her ex-husband had used the fraudulently obtained funds to finance his lifestyle, including several Lamborghinis and luxury boats, business equipment, and to prop up his failing businesses.

He had created false email addresses in her name for director applications and to take out loans. Her identity was used to pay wages and funnel funds into accounts that she never saw a cent of. Unauthorised accountants she’d never met filed tax returns through her tax account, with tax refunds directed to her ex-husband.

Christine’s husband had financially abused her on an egregious scale, and it wasn’t hard.

Christine was held liable for her ex-husband’s large debts he’d named her guarantor for. The impact of his fraud was made worse by Christine unknowingly being made a Director of several companies, making her liable for those companies’ debts.

Terrified by the threat of losing her home, where she lived with her young children, Christine sought help. Each, together with pro-bono lawyers and ASIC investigators, worked solidly for three years to relieve Christine of her ex-husband’s financial abuse and help her recover.

Persistence paid off. After a long battle, all creditors agreed not to pursue Christine or her home, and her directorships and liabilities were annulled. Late in 2024, ASIC successfully prosecuted her ex-husband, and he received a one-year suspended jail sentence.

Christine has begun rebuilding her life, working with a financial independence counsellor to plan a future for her and her children.

But the story is far from over, and the damage is lasting.

The emotional and financial costs of the abuse on Christine can never be repaid, and her case is just one of many when it comes to financial abuse in business.

The ATO has said it is investigating the alleged fraud Christine has been victim of and can’t comment yet on remediation actions. Her case exposes the severe systemic failures in protecting and responding to victims of this type of abuse.

Her case exposes systemic failures in protecting and responding to victims of this type of abuse. Without support and intervention, Christine and her children would have faced bankruptcy and homelessness.

Christine’s case exposes a darker truth about financial abuse victims' struggle for justice: they are effectively guilty until proven innocent, bearing the burden and cost of proving their innocence in a system that isn’t equipped to help them.

In a country of more than 2.5 million small businesses, the conditions for this abuse are ripe; and while financial and legal systems allow it, it will continue. Like all abuse, it will disproportionately impact women.

As Christine’s case continues, it serves as both a warning about the devastating scope of business-related financial abuse and a call to action for systemic change in the commercial and professional sector.

Calling for support

The Each small business financial counselling service that Christine credits with saving her from financial ruin and homelessness and advocates nationally on business-related financial abuse will close on June 30, when their state funding ends.

Each is advocating for a Federal Government-funded National Centre for Financial Abuse in Business pilot program, to help other victim survivors like Christine.

Each is also advocating on financial abuse in business through the Economic Abuse Reference Group (EARG).