Imagine a mid-sized UK manufacturer discovering that a rogue salesperson’s fake invoices have put the entire company at risk, not just reputationally, but criminally. From 1 September 2025, strict new liability regulations apply. Businesses must demonstrate they have reasonable fraud-prevention procedures in place or face unlimited fines and prosecution. This is a radical alteration in perspective and means that compliance is no longer confined to the boardroom, it stretches across every desk and into every inbox.

The Regulatory Earthquake

“When ignorance isn’t a defence”…. that’s the seismic shift at the heart of the UK’s new failure to prevent fraud offence, brought in by the Economic Crime and Corporate Transparency Act 2023. From 1 September 2025, large organisations, including multinationals with UK links, face strict liability if an “associated person” (such as an employee or agent) commits fraud for the firm’s benefit, regardless of senior management’s knowledge of the conduct, or otherwise.

This marks a progression from earlier “failure to prevent” statutes in bribery and tax evasion, echoing the Bribery Act 2010. It now goes further into uncharted waters by encompassing the full breadth of fraud offences.

Meanwhile, across the Channel, the EU is ramping up accountability through the Corporate Sustainability Due Diligence Directive (CSDDD), mandating businesses to identify and mitigate human-rights and environmental risks across their value chains, and the EU Whistleblower Directive, designed to protect individuals exposing wrongdoing and boost enforcement transparency.

In essence, firms can no longer claim ignorance. It’s time to proactively embed anti-fraud defences across the entire business.

Why This Matters Now

In the wake of COVID-19 and amid lingering economic uncertainty, fraud has surged to epidemic levels, accounting for a staggering 40–41% of all crimes in the UK, with a 31 per cent rise in incidents to approximately 4.2 million in the year ending March 2025  according to the Office for National Statistics. Digital fraud continues to proliferate: remote purchase scams alone totalled nearly 2.6 million cases in 2024, with over £1.2 billion lost.

Regulators face mounting pressure from consumers, investors and governments to clamp down hard. The UK’s Financial Conduct Authority (FCA) now screens some 100,000 websites daily, removing misleading financial promotions, while alerting consumers more proactively. Meanwhile, the Serious Fraud Office (SFO) is bolstering cross-border enforcement, freezing crypto-assets for the first time and stepping up investigations into large-scale frauds.

Firms that once relied on ignorance of wrongdoing among executives are no longer safe. The law now demands proof of proactive, effective anti-fraud measures across the board.

The Cultural Shift: From Box-Ticking to DNA

Once, anti-fraud strategies involved dusty policy binders and obligatory annual e-learning modules; compliance as rote exercise. Now, a vivid cultural transformation is underway. Firms are increasingly recognising that sustainable fraud prevention must be woven into the very fabric of their organisation, its DNA.

Behavioural economics is playing a surprising starring role in this. Companies are drawing on psychological insights to design controls that reduce temptation and nudge honest choices, rather like the UK’s Behavioural Insights Team applies “nudge” principles to public policy. Meanwhile, real-time AI and predictive analytics offer powerful eyes and ears, with tools like the software firm Quantexa enabling businesses to spot intricate fraud networks by linking disparate data points, and modelling anomalies before fraud strikes.

Crucially, the emphasis has shifted: it’s no longer “tone from the top” alone… now, middle managers are the vital front line. Empowered, alert and accountable, they bridge the gap between policy and practice and ensure that anti-fraud vigilance lives in every team, not just at board level.

Enforcement and Ever-closer Scrutiny

With fraud enforcement now firmly in sight, regulators are harnessing unprecedented cross-border coordination. The UK’s SFO collaborates closely with Europol and the European Public Prosecutor’s Office (EPPO), enabling more agile, joined-up responses to multi-jurisdictional fraud, particularly those targeting the EU’s financial interests.

Enforcement is no longer theoretical. Deferred Prosecution Agreements (DPAs) have become a cornerstone of corporate accountability, exemplified by the Airbus DPA, the UK’s largest to date at nearly €991 million, stemming from a collaboration between the SFO and French prosecutors. Regulators now assess not just the presence of anti-fraud policies, but whether they actually work in practice.

The reputational stakes are equally high. Investors and stakeholders increasingly scrutinise ESG and governance failures with the same vigour as financial misstatements. The message is stark: in today’s enforcement landscape, it isn’t sufficient to say you had controls, it must be evident they achieved results.

Shared Responsibility Across Borders

Under the banner “Strict Liability, Shared Responsibility”, businesses operating across the UK and EU find themselves navigating a tightening web of cross-border accountability. The UK’s failure-to-prevent-fraud offence demands demonstrable proactive measures, while on the Continent, the EU’s CSDDD extends binding responsibilities on companies to identify and mitigate human-rights and environmental harms across their entire value chains, regardless of geography.

National precedents in Germany and France already underscore this trend: Germany’s Supply Chain Due Diligence Act penalises large companies for failing to curb abuses in their supply networks, while France’s Sapin II framework continues to push compliance beyond mere paperwork into actionable anti-corruption leadership.

For multinationals, the message is clear: compliance siloes no longer suffice. Instead, firms must build systems that meet and harmonise with the highest standard across all jurisdictions. Infringements in one territory can trigger repercussions across others.

Embedding Anti-Fraud DNA

In keeping with the theme “Beyond the Boardroom”, embedding anti-fraud DNA means turning compliance into more than checkbox exercises. It requires making anti-fraud vigilance second nature. One novel tactic is gamified fraud awareness training, turning dry guidance into interactive missions. Gamification can boost participation, retention and engagement, ensuring learning sticks rather than fades into forgetfulness.

Another forward-thinking idea: appointing “fraud champions” in each department. These are peer leaders who reinforce integrity in daily work, translating policy into real behaviour. Alongside this, anonymous AI-driven reporting tools, such as FaceUp, provide safe, confidential channels for whistleblowing, multiplying reports and deterring wrongdoing.

Perhaps most compelling; tying executive bonuses to fraud prevention metrics, not just financial outcomes. This shifts incentives from reacting to wrongdoing towards proactively preventing it. Collectively, these methods transform anti-fraud defences into living systems which are capable of adapting alongside culture and technology, rather than static controls simply gathering dust on the boardroom shelves.

Looking Ahead: What Businesses Need to Learn

Looking ahead, the next wave of enforcement will hinge on AI-driven audit trails, digital footprints embedded into systems that regulators can trace to verify how firms detect and prevent fraudulent behaviour in real time. The FCA, for instance, is already deploying AI to monitor misconduct and has flagged its ambition to become a “world-class data-led regulator”. Fraud is rapidly becoming a central ESG concern. The UK’s new offence even covers dishonest ESG statements, bringing greenwashing into the scope of fraud liability. Meanwhile, investor expectations are evolving. Boards and executives now face heightened scrutiny; if a director “ought to have known” about fraud, personal accountability could follow.

Ultimately, fraud liability is no longer about what the board knew, it’s about what the company did to prevent it. The organisations that will emerge stronger are those that embed resilience into their DNA, building systems that adapt, learn and withstand scrutiny. After all, in today’s regulatory climate, prevention isn’t just better than cure, it’s survival itself. So, the challenge; when the first high-profile test case lands, will your company be ready?

And what about you…?   

  • Do you believe your company’s current anti-fraud training genuinely changes behaviour, or is it more of a box-ticking exercise?
  • If a high-profile fraud case broke in your sector next month, how prepared would your organisation be to reassure investors, regulators and customers urgently and effectively?