Failure to prevent fraud: how recruitment agencies can help clients avoid unlimited fines

From September 2025, the UK introduces a powerful new corporate offence under the Economic Crime and Corporate Transparency Act (ECCTA): failure to prevent fraud.

 

The stakes are high. Any organisation found guilty could face unlimited fines, along with reputational fallout that no brand wants to manage.

 

For recruitment agencies, this development isn’t background noise, it’s a chance to step into a more strategic role. Agencies are often the first line of defence against fraud, because the people they put forward are the same people who will later handle money, data, and client trust.

 

By working with a trusted partner like Giant Screening, you can back up that responsibility with proven screening and compliance expertise, helping clients demonstrate the “reasonable steps” regulators expect while adding measurable value to every placement.

 

In other words: the way you recruit could help determine whether your clients stay compliant or end up exposed.

 

The new offence works like this: if an employee, contractor, or senior manager commits fraud that benefits an organisation, the organisation itself can be prosecuted.

 

The only way out is for that organisation to show it took “reasonable steps” to prevent fraud in the first place.

 

That defence doesn’t start in the boardroom. It starts the moment someone applies for a job.

 

Recruiters have unique influence here:

• You decide which candidates make it to interview.
• You verify the information that employers rely on.
• You can uncover red flags before they enter your client’s business.

By embedding stronger checks and transparent hiring practices, agencies can give clients the evidence they need to prove they acted responsibly.

 

The government will be issuing detailed guidance, but the direction is already clear. Reasonable steps are likely to mean:

• Verifying candidate identities thoroughly
• Screening qualifications, employment history, and professional track records
• Running checks for criminal or financial red flags where appropriate
• Maintaining clear records to show these checks were done
• Re-screening individuals in sensitive or high-risk positions

These steps aren’t optional extras anymore, they’re the backbone of compliance. And agencies that can provide them as standard are in a prime position to win client trust.

 

Background screening has traditionally been seen as admin, something that slows down the hiring process. Under ECCTA, it becomes a compliance shield.

Recruitment agencies that build in smart, risk-based screening can offer clients far more than speed and candidate choice. You can offer protection.

 

• Identity verification: confirming that candidates are who they say they are.
• Criminal record checks: identifying patterns of fraud or dishonesty before a hire is made.
• Employment and education verification: catching CV inflation, fake degrees, or unexplained gaps.
• Credit checks: where financial responsibility is central to the role.
• Ongoing re-check services: giving clients the option to review staff at regular intervals.

Each of these services is concrete, auditable, and defensible if a regulator comes knocking.

 

If clients can’t show they’ve taken steps to prevent fraud, the risks are huge:

• Unlimited fines that could cripple their finances
• Damage to reputation with investors, regulators, and customers
• Operational disruption as investigations unfold

But there’s also a risk to agencies. If your placements become linked to fraud, clients may question whether your processes are up to scratch. Competitors who offer more robust screening will quickly look like the safer choice.

 

While the ECCTA raises the pressure, it also creates an opportunity for recruitment agencies to stand out.

By positioning fraud prevention as part of your value proposition, you can shift client perception: you’re not just filling vacancies, you’re safeguarding their future.

 

• Designing enhanced screening packages for roles with higher fraud risk
• Providing audit-ready reports that clients can store for compliance purposes
• Offering advice on re-check policies, so clients remain compliant beyond day one
• Partnering closely with client HR, legal, and compliance teams to align recruitment with governance

The deadline is here, and now is the time to act. Agencies should:

1. Review current vetting processes and identify gaps.
2. Develop tiered screening solutions based on role risk.
3. Train consultants on the basics of the ECCTA, so they can speak confidently with clients.
4. Build fraud prevention into marketing messages, showing clients you’re ahead of the curve.

The failure to prevent fraud offence is a landmark change. It places prevention firmly on the shoulders of employers but recruitment agencies have a unique opportunity to help.

 

By embedding background checks and fraud risk screening into your core service, you can give clients confidence that they’re taking the right steps and demonstrate your agency’s value far beyond candidate sourcing.

 

Unlimited fines mean the stakes couldn’t be higher. Agencies that adapt now won’t just help clients stay compliant they’ll set themselves apart as indispensable partners in a new era of accountable hiring.

 

Partner with Giant Screening to deliver the “reasonable steps” your clients need and turn fraud prevention into an advantage.