Offence of 'failure to prevent fraud' introduced

The Economic Crime and Corporate Transparency Act 2023 (ECCTA), which introduces a new corporate criminal offence of ‘failure to prevent fraud’, came into effect on Monday 1st September 2025. 

Under the new law, large organisations can be held criminally liable where an employee, agent, subsidiary or other ‘associated person’ commits a fraud intending to benefit the organisation.

Examples include dishonest sales practices, hiding important information from consumers or investors, and dishonest practices in financial markets. 

In the event of prosecution and as part of its defence, an organisation will have to demonstrate that it had reasonable fraud prevention measures in place at the time the fraud was committed.

Economic Crime and Corporate Transparency Act 2023