From today, 1 September 2025, large organisations across the UK are now criminally liable if they fail to prevent fraud committed by employees or associates for the benefit of the organisation.
This significant change, part of the Economic Crime and Corporate Transparency Act 2023, marks a pivotal moment in the UK’s fight against financial crime. Companies can face unlimited fines if they cannot demonstrate that they had reasonable prevention procedures in place.
Who Is Affected?
The new corporate offence applies to organisations that meet at least two of the following criteria:
- 250 or more employees
- Annual turnover of more than £36 million
- Total assets exceeding £18 million
It also applies to overseas companies that have strong UK connections.
What This Means for Businesses
The law closes a long-criticised loophole by making it clear that ignorance is no defence. Senior leaders cannot argue that fraud was committed without their knowledge. Instead, organisations must prove that they had taken adequate steps to prevent it.
Lord Hanson, the UK’s Fraud Minister, described the change as “pivotal”, while Nick Ephgrave, Director of the Serious Fraud Office, called it “a significant new tool for prosecutors to tackle serious and complex fraud.”
Reasonable Procedures: What Does ‘Adequate’ Look Like?
To avoid liability, organisations must show that they had proportionate and effective anti-fraud measures in place. These typically include:
- Fraud risk assessments across business operations
- Clear policies and reporting lines to prevent and detect fraud
- Employee and leadership training tailored to fraud awareness
- Executive and associate screening to flag integrity concerns early
- Regular monitoring and independent audits to ensure procedures remain fit for purpose
How Capcon Argen Can Help
Our client, Capcon Argen, specialises in intelligence, investigations, and risk management. They help organisations implement and evidence robust fraud prevention measures that meet regulatory expectations.
Services include:
- Executive and associate screening – identifying red flags before they become liabilities
- Fraud risk assessments – exposing vulnerabilities across divisions, subsidiaries, or supply chains
- Tailored training and awareness programmes – ensuring boards and teams understand their obligations
- Independent compliance audits – demonstrating that fraud prevention frameworks are in place and effective
- Investigations and intelligence gathering – discreet support when concerns arise, protecting your business and reputation
With decades of experience advising organisations on governance and risk, Capcon Argen will help to ensure that your procedures stand up to scrutiny – from regulators, auditors, and stakeholders.
Contact your usual Beavis Morgan Partner or Capcon Argen on:
+44 (0)1372 237 050
www.capcon.co.uk/argen-services
Don’t leave compliance to chance. Get in touch to discuss how, together, we can help your organisation prepare for the new Failure to Prevent Fraud offence.
Read more: https://www.gov.uk/government/news/new-measures-to-tackle-fraud-come-into-effect
