Introduction
On 6 November 2024, the UK government released official guidance on the new corporate offence of failure to prevent fraud, introduced under the Economic Crime and Corporate Transparency Act 2023 (ECCTA). Set to take effect from 1 September 2025, this offence makes large organisations criminally liable if they fail to prevent fraud committed by their associates for the benefit of the organisation or its clients.
This article explores the key takeaways from the guidance, the compliance implications for UK companies, and how H & H Associates can help businesses prepare for the new regulatory landscape.
Key Takeaways from the 2025 UK Fraud Prevention Guidance
Scope of the Offence: Who is Affected?
The failure to prevent fraud offence applies to large organisations that meet at least two of the following criteria in the financial year preceding the fraud offence:
✅ More than 250 employees
✅ More than £36 million turnover
✅ More than £18 million in total assets
A parent company will also be classified as a “large organisation” if its group-level figures meet at least two of these thresholds.
Who is Considered an “Associate”?
Under the new guidance, “associates” include:
- Employees
- Agents
- Subsidiaries
- Contractors and third parties performing services on behalf of the organisation
If fraud is committed by any of these associates and the organisation has not taken reasonable steps to prevent it, the company may face criminal liability.
How Can Companies Defend Themselves?
A company will not be held liable if it can prove that:
✅ It had “reasonable procedures” in place to prevent fraud.
✅ It was not reasonable to have such procedures based on the organisation’s risk profile.
The guidance sets out six key principles for establishing “reasonable fraud prevention procedures”:
Six Principles of Fraud Prevention (2025)
1️⃣ Top-Level Commitment – Leadership must foster a strong anti-fraud culture and ensure clear policies are in place.
2️⃣ Risk Assessment – Companies must regularly identify, assess, and address fraud risks.
3️⃣ Proportionate Prevention Procedures – Anti-fraud measures should be tailored to the company’s risk exposure and business model.
4️⃣ Due Diligence – Background checks and vetting of employees, partners, and third-party service providers are critical.
5️⃣ Training & Communication – Employees should fully understand fraud risks and the organisation’s policies.
6️⃣ Monitoring & Review – Companies must establish fraud detection mechanisms and continually update their fraud prevention strategies.
Implications for UK Businesses
1. Increased Compliance Requirements
Large organisations must now demonstrate that they have taken reasonable steps to prevent fraud. This may require new policies, risk assessments, internal audits, and compliance training—all of which demand additional investment in resources.
2. A Cultural Shift Towards Fraud Prevention
The UK government is placing greater emphasis on corporate governance and ethical business practices. Businesses must foster a zero-tolerance culture towards fraud, ensuring that their employees and partners comply with anti-fraud policies.
3. Legal and Financial Risks
Failure to comply with the new fraud prevention law could result in:
🚨 Unlimited fines
🚨 Criminal prosecution
🚨 Reputational damage
🚨 Loss of business contracts and investor confidence
Organisations must act now to avoid potential liabilities.
How H & H Associates Can Help Your Business Prepare
At H & H Associates, we specialise in corporate compliance, risk management, and fraud prevention. Our team of compliance experts and legal advisors can help your organisation navigate the new regulations and implement effective fraud prevention measures before the 1 September 2025 deadline.
✅ 1. Comprehensive Fraud Risk Assessments
We conduct in-depth fraud risk audits to identify weaknesses in your organisation’s processes, ensuring you meet the new regulatory requirements.
✅ 2. Custom Fraud Prevention Policies & Procedures
We develop tailored anti-fraud procedures aligned with the six key principles outlined in the government’s guidance, ensuring your organisation is fully compliant.
✅ 3. Staff Training & Awareness Programmes
We design and deliver bespoke fraud prevention training for employees, managers, and leadership teams to build a strong anti-fraud culture within your organisation.
✅ 4. Due Diligence & Third-Party Risk Management
We help businesses establish robust due diligence processes for suppliers, agents, and partners to mitigate fraud risks.
✅ 5. Fraud Detection, Monitoring & Reporting Systems
We implement fraud detection mechanisms and compliance monitoring tools to help businesses proactively prevent fraud before it occurs.
Final Thoughts: Time to Act
The new failure to prevent fraud offence under ECCTA 2023 represents one of the most significant changes to UK corporate crime law in recent years. Large organisations must act now to review and enhance their fraud prevention measures before the 1 September 2025 enforcement deadline.
At H & H Associates, we are committed to helping UK businesses stay ahead of the curve, ensuring they meet regulatory requirements while safeguarding their reputation and financial well-being.
🚀 Don’t wait until it’s too late—get your fraud prevention strategy in place today.
🔹 Get in touch with H & H Associates for expert guidance.
📞 Contact us now to schedule a consultation!
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