Starting September 2025, UK companies will face criminal charges if they fail to stop fraud by their employees or agents – and whistleblowers will be crucial in exposing corporate wrongdoing.
The new “failure to prevent fraud” law has real teeth. Companies can’t just claim ignorance anymore – they must prove they had “reasonable” fraud prevention measures in place. For whistleblowers and anti-corruption advocates, this creates powerful new opportunities to hold corporations accountable.
Here’s what corrupt companies fear most about the new law:
They’re on the hook for fraud by anyone working for them – employees, agents, subsidiaries, and contractors. One bad actor can trigger criminal liability for the entire organization.
Senior executives can’t hide behind plausible deniability. The law requires “top-level commitment” to preventing fraud. Leaders must actively foster a speak-up culture and protect whistleblowers who report misconduct.
Companies must conduct thorough risk assessments and due diligence. No more turning a blind eye to red flags or rushing deals without proper vetting. They’ll need to monitor staff wellbeing and watch for warning signs like excessive pressure to hit targets.
The jurisdictional reach is broad – even non-UK companies can be prosecuted if the fraud has UK connections. Corporate fraudsters can’t escape by operating from offshore havens.
For whistleblowers considering speaking up:
- Companies must have clear whistleblowing procedures and protect those who report concerns
- Documentation of inadequate fraud controls could help prove company liability
- Both the Crown Prosecution Service and Serious Fraud Office can bring cases
- Penalties include unlimited fines
While companies have until September 2025 to prepare, smart whistleblowers should start documenting evidence now if they spot:
- Weak or non-existent fraud prevention measures
- Leadership ignoring or covering up fraud risks
- Retaliation against those who speak up
- Pressure to hit unrealistic targets that encourage fraud
- Inadequate staff training and resources
The guidance makes clear – perfunctory paper policies won’t cut it. Companies need real, working fraud prevention systems. Those that don’t face criminal prosecution when whistleblowers expose the truth.
For too long, corporate fraudsters have escaped accountability. This law gives whistleblowers powerful new tools to fight back. The clock is ticking for companies to clean up their act – or face the consequences.