Home Office publishes new failure to prevent fraud guidance

The Home Office has published guidance for organisations on the new corporate criminal offence of failure to prevent fraud, which was introduced last year as part of the Economic Crime and Corporate Transparency Act (ECCT).

Under the offence, which has cross-Parliament support, large organisations may be held criminally liable where an employee, agent, subsidiary, or other “associated person”, commits a fraud intending to benefit the organisation. 

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

The offence is intended to encourage organisations to build an anti-fraud culture, in the same way that failure to prevent bribery legislation has helped reshape corporate culture since its introduction in 2010. 

The guidance has been developed with input from the Crown Prosecution Service (CPS), Serious Fraud Office (SFO), HM Treasury, HMRC, Ministry of Justice, Cabinet Office, Attorney General’s Office and Financial Conduct Authority (FCA). 

Failure to prevent fraud will come into force on 1 September 2025. 

Corporate fraud significantly damages confidence in UK companies and ultimately costs the taxpayer.

The publication of this guidance means that time is running short for corporations to get their house in order or face criminal investigation.

Nick Ephgrave QPM, Director of the Serious Fraud Office (SFO)

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