Failure to prevent fraud: what compliance officers need to know

With the 'failure to prevent fraud' offence now in force, an additional burden rests on compliance functions to ensure that firms have reasonable procedures in place to counter relevant risks. Charlotte Hill outlines the scope of the new offence, lessons from parallel legislation and practical steps to implement.

Charlotte Hill, a partner with Charles Russell Speechlys in London, has substantial experience in providing international regulatory advice on both fintech and other financial services regulation matters. Contact her on charlotte.hill@crsblaw.com.

Fraud has become the United Kingdom's most commonly-experienced crime, accounting for almost 40 per cent of all offences reported in England and Wales. Its scale is staggering, its forms endlessly varied, and its impact corrosive: undermining trust in financial institutions, draining public resources and destabilising confidence in emerging markets such as digital assets. Against this background, the UK Government has introduced a new and far-reaching corporate criminal offence of 'failure to prevent fraud' under the Economic Crime and Corporate Transparency Act 2023 (ECCTA).