THE UK’s new Failure to Prevent Fraud offence comes into force today, but many Scottish businesses remain ‘underprepared’ to comply with their legal obligations, according to Dentons.
The law firm said discussions with industry and informal research conducted from February through to June 2025 showed companies, including those in Scotland, have been slow to take the necessary steps to get ready.
Failure to Prevent Fraud was introduced as part of the Economic Crime and Corporate Transparency Act 2023 (ECCTA) and creates a strict liability criminal offence for in-scope companies that fail to prevent fraud by individuals associated with them, where the fraud benefits the organisation or its customers. The only defence is to demonstrate that reasonable and proportionate fraud controls were in place.
Dentons revealed that as of June this year:
- 30% of businesses spoken to had not appointed anyone to oversee compliance;
- Of the 70% that had taken measures, most had assigned responsibilities to already stretched compliance teams in need of support; and
- 78% had not completed — or even begun — a fraud risk assessment, a key component of the ‘reasonable procedures’ described in government guidance.
Even as of August 2025, Dentons said businesses across multiple sectors — including high-risk industries like construction — reported ‘limited’ progress, citing competing demands on compliance functions as the main barrier.
In response, Dentons has launched a toolkit to help organisations assess and address gaps in their fraud prevention measures.
Katy MacAskill, senior associate in Dentons’ regulatory and investigations team in Glasgow and co-developer of the toolkit, said, “The introduction of FTP marks a significant shift in the corporate fraud landscape for Scottish businesses. It is a strict liability offence, meaning Scottish companies will not be able to rely on good intentions or retrospective justifications in place of robust, proportionate and bespoke fraud prevention measures.
“Our data shows that there is still a lack of preparation across industry, which is understandable given today’s competing compliance workload. However, with the offence in force as of 1 September, there is now an urgent need for Scotland’s in-scope firms to ensure that they are sufficiently protected.
“We are particularly mindful about the pressure on overburdened compliance teams. We have designed the FTP Toolkit to try and ease that burden, helping teams act identify gaps and effectively meet their obligations.”
