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In 2025, the United Kingdom will introduce a landmark shift in corporate fraud liability, holding businesses accountable for fraud committed by employees, agents, and other associated persons. Under the Economic Crime and Corporate Transparency Act 2023 (ECCTA), companies operating in the UK will face strict liability for failing to prevent fraud unless they can prove they had "reasonable procedures" in place.
This move is part of a broader effort to combat financial crime and increase corporate accountability. As the UK prepares for implementation, the question arises: will the United States adopt similar measures?
What is the UK's "failure to prevent fraud" offense?
Beginning September 1, 2025, companies that fail to prevent fraud could face unlimited fines, even if leadership was unaware of the fraudulent activity. The offense applies broadly, covering both UK-based businesses and foreign companies with operations in the UK, even if the fraud takes place outside of the country.
The law casts a wide net, holding businesses responsible for fraud committed by employees, subsidiaries, or agents acting on their behalf. However, third-party suppliers are generally exempt unless they provide services directly to the company. The UK government has already issued guidance encouraging businesses to evaluate their fraud prevention measures, conduct risk assessments, and implement employee training programs to reduce exposure.
The model for this legislation isn’t entirely new. The UK Bribery Act 2010 introduced a similar failure to prevent bribery offense, which led to widespread corporate reforms in anti-corruption compliance. UK regulators hope these new fraud liability rules will have the same impact.
How does the US approach fraud liability?
The United States takes a very different approach to fraud regulation, relying on a mix of federal and state laws rather than a single overarching framework. While businesses can be held liable for certain types of fraud, there is no strict liability rule comparable to the UK’s.
One of the closest regulatory parallels is Regulation E, which requires financial institutions to reimburse consumers for unauthorized electronic fund transfers. However, the scope is limited. Regulation E does not cover fraud where a consumer is manipulated into making a payment, such as social engineering scams. Additionally, while financial institutions are responsible for investigating fraud claims, they are not automatically liable for failing to prevent fraud from occurring in the first place.
Will the Trump administration push for stricter fraud liability?
Given the recent shift under President Trump’s administration, it is unlikely that the US will adopt UK-style fraud liability rules in the near future. The administration has initiated significant deregulation efforts, particularly within financial oversight agencies. Discussions are already underway about consolidating or even eliminating certain banking regulators, such as merging the Federal Deposit Insurance Corporation (FDIC) into the Treasury Department and combining its role with the Office of the Comptroller of the Currency.
The Consumer Financial Protection Bureau (CFPB), which was originally created to protect consumers from unfair financial practices, has also seen a substantial rollback in its activities. The administration has ordered a suspension of CFPB investigations and proposed rules, effectively halting many of its enforcement actions. This broader deregulatory push is aimed at fostering a more business-friendly environment but raises questions about the future of corporate accountability in the US.
By contrast, the UK is moving in the opposite direction, increasing corporate responsibility for fraud prevention. This divergence underscores two competing philosophies: the UK’s proactive regulatory stance versus the US’s emphasis on deregulation and corporate autonomy.
What would it take for the US to adopt similar rules?
For the US to introduce laws comparable to the UK's “failure to prevent fraud” offenses, several structural and political barriers would need to be overcome. The US financial regulatory system is fragmented, with different agencies enforcing fraud laws at both the state and federal levels. Implementing sweeping changes would require significant coordination between lawmakers, regulators, and the US financial services industry.
Political resistance would also be a major factor. Historically, the US has been hesitant to impose strict liability on corporations unless clear negligence can be proven. Given the current administration’s stance on reducing regulatory oversight, expanding fraud liability laws would be an uphill battle.
Financial institutions are another key stakeholder. Banks and fintechs are likely to push back against expanded liability, arguing that fraud prevention cannot be entirely their responsibility. Unlike the UK, which has the Faster Payments system for quick fraud reimbursements, the US has yet to fully implement FedNow, an instant payment service developed by the Federal Reserve. This means that real-time reimbursement infrastructure remains limited. Without strong payment protections in place, enforcing strict fraud liability at scale would be significantly more challenging.
Looking ahead
The UK’s new fraud liability rules mark a major shift in corporate accountability, setting a precedent that other countries will be watching closely. If the law proves effective in reducing fraud and encouraging better corporate compliance, it could fuel conversations about similar measures elsewhere—including in the US.
However, under the current administration, deregulation appears to remain the priority. For now, any movement toward UK-style liability laws in the US is unlikely. Instead, businesses should continue to invest in building strong fraud prevention strategies, particularly as consumer protection groups push for stronger safeguards. While new fraud liability rules may not be imminent, the pressure for greater corporate accountability isn’t going away.
As regulations shift globally, businesses need to stay ahead of compliance risks. Download our guide on navigating regulatory changes and mitigating risk to make sure your company is prepared.
Stay ahead of compliance shifts
As regulations shift globally, businesses need to stay ahead of compliance risks. Download our guide on navigating regulatory changes and mitigating risk to make sure your company is prepared.
