The Economic Crime and Corporate Transparency Act 2023 (ECCTA) introduced a new offence of failure to prevent fraud (FTP Fraud Offence), which will come into effect on 1 September 2025. Organisations now have just over seven months to digest the elements of the offence and of 'reasonable procedures', implement any required changes, and adapt to this significant cultural shift in regulatory and law enforcement expectations.
The FTP Fraud Offence is complex, with a number of detailed points that organisations may wish to work through to establish their risk profile before implementing or enhancing a fraud prevention framework. The Home Office has published guidance on the FTP Fraud Offence (Guidance), which provides insight into what will be expected of organisations in terms of fraud prevention procedures. However, the Guidance is not prescriptive so careful thought and proper engagement will be required to ensure appropriate and risk-based measures are put in place.
With this in mind, and in particular for those who are coming to this topic without having followed the detail of the developments so far, this briefing provides an overview of the key elements of the FTP Fraud Offence and, crucially, what organisations should be doing now to ensure they are prepared before the September implementation date.
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