Big Firms Face Tough New Fraud Crackdown
A powerful new law will make it easier to prosecute big companies if their employees commit fraud to boost the business. Organisations must now prove they had proper fraud prevention measures in place — or face unlimited fines.
Failure to Prevent Fraud: Game Changer for UK Law
The “failure to prevent fraud” offence, introduced via the Economic Crime and Corporate Transparency Bill, will hold firms criminally liable if they fail to stop dishonest staff. Prosecutors won’t need to prove bosses knew about the fraud, just that the company lacked reasonable safeguards.
Security Minister Tom Tugendhat said:
“We are determined to crack down on unscrupulous companies that seek to defraud their customers. This new offence will protect consumers from dishonest sales & level the playing field for responsible businesses.”
Serious Fraud Office and CPS Back New Measures
Law enforcement chiefs are backing the move. Lisa Osofsky, Director of the Serious Fraud Office, called the new offence a “game-changer” that will help crack down on fraudsters and protect the UK economy.
“This would bring fraud law in line with bribery, helping us compensate victims and safeguard market integrity.”
Chief Crown Prosecutor Andrew Penhale added the law is “welcome” amid fraud now making up 41% of UK crime, targeting large firms that fail on fraud controls.
What This Means for Businesses
- Firms can be fined without limit if employees sell products under false pretences or falsify accounts without proper anti-fraud measures.
- The law encourages companies to build a fraud-proof culture, deterring dishonest behaviour.
- SMEs are exempt but still accountable under existing rules.
- Guidance on what counts as “reasonable measures” will be published before the law is enforced.
- The law covers the entire UK.
This crackdown is part of wider efforts to cut economic crime, safeguard consumers, investors, and taxpayers, and boost corporate transparency.
