What Is the “Failure to Prevent Fraud” Offence?
The UK has introduced a new criminal offence coming into effect on 1 September 2025:
If someone connected to your organisation commits fraud that benefits your company, and you don’t have reasonable prevention procedures in place, you can be prosecuted.
And yes, this applies even if you didn’t know it was happening.
This is the latest addition to the “failure to prevent” family, following:
- The UK Bribery Act 2010
- The Criminal Finances Act 2017
The shift? Now organisations must prevent internal fraud, not just react to it.
Why This Matters to Micro and Small Companies in the Netherlands
"We’re too small for this to affect us" is the most dangerous sentence an entrepreneur can say.
While this law targets large organisations (over 250 employees or €42M turnover), the compliance expectations and cultural pressure are already spreading across borders.
Investors, banks, regulators, even clients, are starting to expect fraud prevention frameworks as basic hygiene, not luxury.
Especially for Dutch BV's with:
- UK clients or investors
- International partnerships
- Growth funding on the horizon
You may fall within scope, or at the very least, under scrutiny.
What Is “Reasonable” Fraud Prevention?
According to the UK Home Office, your business must have six key measures to show you tried to prevent fraud:
1. Top-Level Commitment
Leadership must actively promote fraud awareness and take visible responsibility.
2. Risk Assessment
Ongoing risk assessments tailored to your actual operations, not copied from templates.
3. Proportionate Procedures
Controls must fit your company size, sector, and complexity. Too little = risk. Too much = waste.
4. Due Diligence
Screen suppliers, staff, partners. Know who’s in your ecosystem.
5. Communication & Training
Everyone in your team must know the rules, and understand why they exist.
6. Monitoring & Review
Prevention without follow-up is theatre. Systems must evolve with your risk landscape.
What Makes This Different from Other Compliance Laws?
Fraud is not like bribery or tax evasion. It’s sneakier, internal, emotional. Here's why this law hits differently:
It Targets Internal Fraud
Think expense abuse, payroll fraud, manipulated KPIs, vendor kickbacks, not just external threats.
It Uses the “Fraud Triangle”
Prevention must address:
- Motivation (pressure to perform)
- Opportunity (weak controls)
- Rationalisation (“I deserve it.”)
It Applies Across All Departments
Not just sales and procurement. Think marketing, HR, finance, operations, fraud can happen anywhere.
It Demands Internal Investigation Readiness
You must be able to prove you had fraud controls before the incident. After-the-fact excuses won’t workfailing-to-prevent-frau….
The ZENTRIQ™ Standard: Our Response to a Rising Risk
At Xtroverso, operating under the ZENTRIQ™ compliance framework, we’ve already integrated proactive fraud prevention into our services:
- W-Team – Monitors financial behaviour and payroll anomalies
- V-Team – Performs integrity checks on partners, clients, suppliers
- Y-Team – Secures digital risk vectors used in cyber-fraud
We believe governance isn’t a checkbox. It’s an ethical operating system.
Final Takeaways for Dutch Entrepreneurs
- This is not just a UK problem.
- Fraud prevention is the new standard.
- Governance is no longer for corporations only.
- Your internal culture is your best, or worst, line of defence.
If you plan to grow, attract funding, or sleep well at night, don’t wait for regulations to knock.