Article

Article

Published29 July 2025

Failure to Prevent Fraud guidance: next steps for businesses

As the new corporate offence of failure to prevent fraud under the Economic Crime and Corporate Transparency Act (ECCTA) becomes effective from 1 September 2025, businesses must now navigate a major change in corporate liability.

This FAQ answers some common questions and outlines what general counsel and compliance leaders must consider to prepare for the changes and implement effective fraud prevention measures.

Frequently asked questions

What is the new failure to prevent fraud offence?

Under Section 199 of ECCTA, a “relevant body” (i.e. a large organisation) commits an offence if:

  • an associated person commits a specified fraud offence;
  • with intent to benefit the organisation or its clients; and
  • the organisation lacks adequate procedures for preventing fraud.

This is a strict liability offence — no need to prove senior management involvement.

Who does the offence apply to?

What fraud offences are covered?

What qualifies as “Intention to Benefit”?

What’s the defence?

Want more detail?

Get to grips with everything you need to know regarding the failure to prevent fraud offence with our in-depth guide. 

Read the guide

Further reading: Understanding ECCTA

Read our more in-depth guide on the failure to prevent fraud offence, as well as our Understanding ECCTA article series.

What should you do now?

The Act does not legally require the introduction of risk-based prevention procedures or measures. However ,failing to act is unlikely to suffice to demonstrate that an organisation had adequate safeguards in place if fraud subsequently occurs. Taking proactive steps now is crucial. At a minimum, you should:

  • Undertake a fraud risk assessment
  • Assess controls against the six principles
  • Revise policies, contracts, and training
  • Document all decisions and rationale

Doing nothing is not a defence. Businesses who do not act face limitless fines, reputational harm, and possible regulatory oversight.

Need help? Contact us for tailored advice.