To support organisations in meeting their obligations under the ECCTA, the UK government has outlined six key principles that form the foundation of an effective fraud prevention framework. These principles offer a structured approach to help businesses mitigate the risk of fraud by ensuring robust policies and controls are in place. Implementing these principles helps organisations comply with UK fraud prevention legislation and safeguard their financial operations.
Top-level commitment: establishing an anti-fraud culture
Organisations should establish a strong anti-fraud culture led by senior management, ensuring that responsibility for fraud prevention is assigned to a designated compliance officer. Regular risk assessments tailored to the organisation’s operations are crucial to identify high-risk areas, such as financial transactions and third-party interactions.
Risk assessment: identifying fraud risks in your organisation
Organisations should focus on implementing comprehensive fraud prevention strategies. The UK government is expected to release detailed guidance, but companies can already begin by adopting best practices from other failure-to-prevent offences (or inspired by general risk assessment procedures).
Proportionate risk-based prevention: procedures tailored to fraud risks
Procedures should be implemented with clear anti-fraud policies and procedures that outline acceptable conduct and reporting mechanisms. Policies must be accessible and regularly updated to reflect evolving risks and procedures must be adequately designed, implemented and supported by an audit trail.
Third-party due diligence: ensuring ethical standards across your network
Third-party due diligence requires companies to screen and monitor business partners, suppliers, and intermediaries to ensure adherence to ethical standards, with contractual commitments to prevent fraudulent practices.
Communication and training: promoting awareness of fraud risks
Regular training sessions should educate employees, contractors, and partners on fraud risks and reporting procedures. Whistleblowing mechanisms should be promoted to encourage internal reporting of suspicious activities.
Monitoring and review: continuous improvement of fraud prevention systems
Organisations need robust internal controls to detect suspicious activity and effective reporting and investigation mechanisms to address allegations swiftly. Leveraging technology and automated systems can significantly enhance the effectiveness of monitoring processes, enabling real-time detection and faster responses to potential fraud. Regular reviews of fraud prevention systems ensure they remain effective and up-to-date.
How Geoficiency Can Ensure Compliance and Deliver Even More
If you are affected by this new Act, geoficiency has the technology you need. We can give you a quick demo and show how it will work with your existing systems to give your financial team full oversight. Not only does it offer improved efficiencies, it also makes compliance easy.
