Uncovering a Hidden Harm: Research that is reshaping financial abuse laws

A/Prof Vivien Chen, 2026

How it began

Vivien Chen came across the problem of coerced debt while working as an honorary research fellow at Melbourne Law School on an Australian Research Council Linkage Project on harmful financial products. While looking into challenges faced by people experiencing vulnerability, she saw a link between single mothers, family violence and debt. She also teaches corporations law, and one of the topics covers directors' liability for insolvent trading even if they are not involved in business decisions. During the COVID-19 pandemic, while financial difficulties, family violence and business challenges were increasing, it dawned on Vivien that uninvolved directors could potentially at times be victim-survivors experiencing coercive control. She asked Carolyn Bond, who was then leading the Economic Abuse Reference Group (EARG), about this; about a year later, Carolyn contacted her about joining one of their meetings.

Practice

Vivien discovered that EARG had collected evidence from members of coerced directorships and business debts, and were looking into making a submission to the Parliamentary inquiry into corporate insolvency. She led the drafting of the submission, including the case studies EARG members had collected. She subsequently wrote a journal article, published by the UNSW Law Journal, to flesh out more of the case law and conceptual arguments relating to the need for regulatory reform to address the problem of victim-survivors being coerced into becoming straw directors, and having to bear the liability for business failure despite often knowing nothing about the business and not making the decisions that led to the debts – some victim-survivors did not even know they had been made directors without their consent.

Output

The article and submission gained the attention of government agencies, who sought Vivien's advice and asked her to collect more data on the problem. It was challenging to find data on a problem that has been so poorly recognised. After much searching, Jasmine Opdam (Financial Abuse NSW) and Vivien were able to put together a national empirical study with members of EARG, documenting how victim-survivors are coerced into business debts and the devastating impacts this has on their lives. They shared the empirical study with Treasury, who also held discussions with them prior to their consultation paper Combatting Financial Abuse Perpetrated Through Coerced Directorships, which outlines various options for reforms to mitigate harm from financial abuse through coerced directorships.

Outcome

As the government has made an election promise to deal with this problem, Vivien and her colleagues anticipate that regulatory reforms will be introduced, and that victim-survivors will benefit from better recognition of this hidden problem. In the past, victim-survivors have suffered in silence, as they were denied assistance for such coerced business debts.

Impact

The empirical research revealed that accountants and other professionals have unwittingly facilitated the perpetration of financial abuse through business arrangements. Peak industry associations such as CPA Australia have since released a suite of resources for their members, to raise awareness of financial abuse and outline steps that accountants can take to disrupt and prevent such harm.