BUSINESSES that unwittingly profit from employee fraud now face prosecution under anti-fraud laws that came into effect today.

The “failure to prevent fraud” offence says that large firms can be held criminally liable where an employee, agent, subsidiary or other associates commit fraud intending to benefit the company, and where reasonable fraud prevention procedures were not in place.

It means that they could be held to account even if managers did not order or know about the crime.

The law forms part of the Economic Crime and Corporate Transparency Act 2023, applies to organisations with more than 250 staff, £36 million in turnover and £18m in total assets.

It includes fraudulent acts from dishonest sales practices and trading in the financial markets, to hiding important information from consumers or investors.

The government, which is due to launch a new fraud strategy, hopes the law will lead to a clampdown on scams.