Yesterday, the Home Office issued new guidance on the offence of “failure to prevent fraud,” introduced under the Economic Crime and Corporate Transparency Act 2023 (ECCTA). The guidance aims to help large organisations understand their responsibilities and implement effective fraud prevention measures.

The offence holds organisations criminally liable if an employee, agent, subsidiary, or other “associated person” commits fraud intending to benefit the organisation, and the organisation did not have reasonable fraud prevention procedures in place at the time of the fraud.

The guidance encourages organisations to foster an anti-fraud culture, similar to the approach taken with the failure to prevent bribery legislation. It outlines the necessary steps and procedures organisations should adopt to mitigate the risk of fraud and ensure compliance with the new law.

This offence will come into force on 1 September 2025, giving organisations time to prepare and implement the required measures. 

For more detailed information, you can refer to our toolkit accessible here. We will be writing more about this in due course.