Failure to Prevent Fraud Offence: A New Era Under ECCTA

The introduction of the Failure to Prevent Fraud offence under the Economic Crime and Corporate Transparency Act 2023 (“ECCTA”) marked a significant shift in the UK’s approach to tackling corporate fraud. 

Coming into force on 1 September 2025, the offence aims to hold organisations accountable if they fail to prevent employees or associated persons from committing fraud for the benefit of the company. This legislative change reflects a broader trend towards greater corporate responsibility and transparency in business practices.

Failure to Prevent Fraud is a new offence under ECCTA and builds upon the principles established by previous ‘failure to prevent’ laws, such as those related to bribery and tax evasion. 

ECCTA requires companies to implement reasonable procedures to deter fraudulent conduct; failure to do so could result in criminal liability, regardless of whether senior management was aware of the wrongdoing.

The law applies to large organisations, including companies and partnerships operating in the UK, and covers a wide range of fraudulent activities, such as false accounting, fraud by abuse of position, and fraudulent trading.

Six months on from its introduction, legal and regulatory observers have closely watched for signs of enforcement activity. 

As of mid-March 2026, there has been significant interest but limited public information regarding actual charges or investigations. 

The Serious Fraud Office (“SFO”) have indicated that they are keen to prosecute under the new law, however, no charges or investigations under the new offence have been formally announced to date.

This lack of immediate public enforcement may be attributed to the complexity of investigating corporate fraud and the need for robust evidence before proceeding to launch investigations and making decisions to prosecute.

Investigations tend to be lengthy, involving detailed scrutiny of company policies, procedures, and internal communications. In addition, many organisations have responded to ECCTA by reviewing and strengthening their anti-fraud frameworks, which may have reduced the likelihood of early breaches being detected, investigated and charged.

Nevertheless, it is likely only a matter of time before the first charges are brought under the new offence. 

The SFO and Crown Prosecution Service have both issued guidance emphasising their commitment to enforcing the law and encouraging whistleblowers to report suspicious activity. The introduction of the offence has also prompted increased dialogue between regulators and corporate compliance teams, with many companies seeking legal advice to ensure their procedures meet the ‘reasonable prevention’ standard.

In conclusion, while there have not yet been any publicly reported charges or arrests under the offence since its introduction on 1 September 2025, its impact is already visible in the heightened awareness and improved compliance efforts across the corporate sector. 

As investigations progress and enforcement agencies continue to monitor compliance, it is expected that the first cases will emerge in due course, setting important precedents for how organisations are expected to prevent fraud in the future.

Complementing the introduction of the Failure to Prevent Fraud offence is the UK Government’s Fraud Strategy 2026–2029, published on 9 March 2026. The three year strategy centres on three pillars: Disrupt, Safeguard, Respond.

What are the implications for organisations?

• Heightened expectations regarding fraud‑prevention controls, particularly for large organisations subject to ECCTA’s existing duties;
• Increased regulatory and enforcement scrutiny across high‑risk sectors;
• Significant opportunities for closer public‑private collaboration, especially through the Online Crime Centre and the sector‑wide data sharing platform due to launch in April 2026.

The message is clear that well‑designed compliance and fraud‑prevention strategies are necessary to meet the standards anticipated under ECCTA and associated enforcement guidance.