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12 Sep 2025
Insight
London
The new corporate offence of failure to prevent fraud came into force on 1 September 2025.
The new strict liability offence, which is contained in the ECCTA, will be committed by an in-scope organisation if an associate (which includes employees, agents and subsidiaries) commits a specified fraud offence, such as false accounting, with the intention of benefitting the organisation or any of its customers.
A company will have a defence if it had reasonable fraud prevention procedures in place.
The Home Office has published statutory guidance for organisations on the new offence, which provides insight into what will be expected of organisations in terms of fraud prevention procedures. However, the guidance is not prescriptive, so careful thought and proper engagement will be required to ensure a company has appropriate measures in place.
You can read more about the offence in our snapshot here and our corporate crime team’s more detailed briefing here.
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