Failure to Prevent Fraud Offence: Frequently Asked Questions (ECCTA 2025)
About the Failure to Prevent Fraud Offence (ECCTA 2025)
The UK’s new Failure to Prevent Fraud offence, introduced under the Economic Crime and Corporate Transparency Act 2023, came into effect on 1 September 2025. This page answers the most common questions about what the law means in practice — from who it applies to, to what counts as “reasonable prevention procedures.
For more detail, see our Failure to Prevent Fraud overview
Source: Crown Prosecution Service
Key Facts and Timing
Q: What is the Failure to Prevent Fraud offence?
A: It’s a new corporate criminal offence under the Economic Crime and Corporate Transparency Act 2023. From 1 September 2025, large organisations can be held liable if an employee, agent, subsidiary, or other associated person commits fraud intended to benefit the organisation (or a client it serves).
Q: When does the Failure to Prevent Fraud offence come into force?
A: The offence took effect on 1 September 2025. From that date, qualifying organisations must be able to demonstrate that they had “reasonable prevention procedures” in place to avoid liability.
Strict Liability and Defence
Q: Is the Failure to Prevent Fraud offence strict liability?
A: Yes. Prosecutors do not need to prove that directors or senior managers knew about or approved the fraud. If the offence was committed for the organisation’s benefit, liability is automatic unless the organisation can prove it had reasonable fraud prevention procedures in place.
Q: What counts as a “reasonable fraud prevention procedure”?
A: The law doesn’t prescribe a single checklist. Instead, it expects organisations to take proportionate steps such as:
Confidential reporting channels
Staff and contractor training
Oversight of subsidiaries and agents
Audit trails and monitoring systems
What is “reasonable” depends on the size, sector and risk profile of the organisation. For practical examples of how these procedures apply in real situations, see our Failure to Prevent Fraud Examples guide
Penalties and Consequences
Q: What are the penalties for failing to prevent fraud?
A: Organisations can face unlimited fines, regulatory investigation, and significant reputational damage. Senior individuals may also face personal liability under other laws if involved in the fraud.
Who the Offence Applies To
Q: Who does the Failure to Prevent Fraud offence apply to?
A: It applies to “large organisations” — those meeting at least two of the following thresholds: more than 250 employees, more than £36 million turnover, or more than £18 million in assets. This includes corporates, charities, and partnerships operating in the UK.
Q: Does the Failure to Prevent Fraud offence apply to charities and not-for-profits?
A: Yes. If a charity or NGO meets the size thresholds, it falls within scope. Large charities in particular will need to demonstrate prevention procedures around grant applications, donor reporting, and partner oversight.
Types of Fraud Covered
Q: What types of fraud are covered by the offence?
A: The offence is linked to specific “base fraud offences” in UK law, including:
False accounting
False statements by company directors
Fraudulent trading
Fraud by false representation
Fraud by failing to disclose information
Fraud by abuse of position
Participation in a fraudulent business
Obtaining services dishonestly
Cheating the public revenue
Aiding or abetting any of the above offences
How organisations can demonstrate compliance
The FAQs above explain the Failure to Prevent Fraud offence itself.
A common follow-up question is how organisations can show they had “reasonable prevention procedures” in place.
The examples below outline typical measures regulators expect, and how tools like imabi Pro can help deliver and evidence them in practice.
Q: What systems support confidential reporting under the Failure to Prevent Fraud offence?
A: To demonstrate reasonable procedures, organisations need secure, trusted channels for staff and third parties to report concerns. imabi Pro offers confidential, anonymous reporting tools with audit-ready logs to show regulators that reporting processes are accessible and effective.
Q: Can imabi Pro provide audit-ready evidence for regulators or insurers?
A: Yes. imabi Pro generates dashboards, case records and trend analysis that can be shared with boards, regulators or insurers. This creates a clear audit trail to support the “reasonable procedures” defence if a fraud investigation occurs.
Q: How can organisations evidence “reasonable prevention procedures” under the Failure to Prevent Fraud offence?
A: Regulators expect measures such as fraud risk assessments, training, reporting channels, case management and audit trails. imabi Pro brings these elements into one platform, helping organisations show they had active prevention procedures in place.
Q: How can organisations train staff to reduce fraud risks under the Failure to Prevent Fraud offence?
A: Regulators expect organisations to show that employees and managers were made aware of fraud risks and reporting routes. imabi Pro delivers targeted micro-learning and policy reminders to the right teams at the right time, creating training records that evidence reasonable prevention procedures.
If you want to explore further:
Start with our Failure to Prevent Fraud overview page
See practical scenarios in our Failure to Prevent Fraud Examples guide
Download our free Failure to Prevent Fraud PDF guide for a complete reference you can share with colleagues.
Ready to prepare your defence?
The Failure to Prevent Fraud offence is now in force. Book a demo to see how imabi Pro helps you evidence prevention, reporting and assurance today.