From 1 September 2025, many awarding organisations across the UK will face a new compliance obligation under the Economic Crime and Corporate Transparency Act 2023 (ECCTA): the corporate offence of failure to prevent fraud. This legislation is designed to hold certain organisations accountable when individuals acting on their behalf commit fraud intended to benefit the awarding organisation or its clients (which could include learners in this context) and where the organisation lacks reasonable procedures to prevent it.

Awarding organisations do already have an obligation to prevent qualification fraud and malpractice under the General Conditions of Recognition, and Ofqual has previously issued an action plan in relation to the prevention of qualification fraud. The obligations under the ECCTA are broader, and encompass a wider range of frauds, but there will be some overlap in the measures awarding organisations should take to prevent these.

For awarding bodies, this means that if an employee, agent, reseller, service provider, centre or end point assessor engages in fraudulent conduct the awarding organisation could be prosecuted unless it can demonstrate that it had proportionate and effective fraud prevention measures in place.

Importantly, the offence does not require proof that senior management knew about or authorised the fraud. Instead, liability arises from the organisation’s failure to prevent it. This shift places a renewed emphasis on governance, risk assessment, and internal controls – areas where awarding organisations must now act decisively. The government has issued comprehensive guidance on the new offence, which you can access here.

The offence applies to “large” organisations, defined as those meeting at least two of the following thresholds: more than 250 employees, over £36 million in turnover, or more than £18 million in total assets. In practice this means that organisations which would normally be considered medium sized would be captured by the new offence. The offence covers a wide range of fraud offences, including false representation, abuse of position, and false accounting.

As an example, an agent or centre for an awarding organisation could commit fraud by false representation by issuing learners with fake certifications for payment. The guidance is clear that even if the agent or representative’s primary intention was to benefit themselves, if their actions also benefit the awarding organisation (for instance through more learners signing up for a qualification) the awarding organisation could be guilty of the new offence.

The guidance recommends that organisations put in place a fraud prevention framework based on the following core principles:

  1. Top-Level Commitment
    • Senior leadership (e.g. board, directors, trustees) must actively promote a culture of integrity and zero tolerance for fraud.
    • This includes formal statements rejecting fraud, visible endorsement of anti-fraud policies, for instance during webinars or “town halls” or by email updates.
  2. Risk Assessment
    • Conduct a dynamic and documented assessment of risk areas for fraud. This could include looking at how centres and agents operate, qualification design, centre approvals, certification, and results processing.
    • Identify high-risk roles, for instance, agents, resellers or smaller centres which are working with minimal oversight and scenarios.
    • Review risk assessments regularly, especially after incidents, during structural changes, or regulatory changes.
  3. Proportionate Risk-Based Procedures
    • Develop a fraud prevention plan proportionate to the risks identified.
    • This may include:
      • Vetting and training for high-risk roles.
      • Reducing the motive for fraud – this could include looking at payment and incentive structures to ensure that these do not encourage fraud.
      • Contractual clauses with centres, end-point assessment centres, agents, and distributors explicitly requiring those organisations to comply the relevant laws and policies relating to fraud, and to notify the awarding organisation if it becomes aware of any breaches.
      • Clear notification and escalation routes for suspected fraud, which could include whistleblowing arrangements.
  4. Due Diligence
    • Carry out due diligence on all associated persons — including centres, agents, resellers, and other delivery partners.
    • This could involve:
      • Screening for past misconduct – including of any key personnel at the organisation.
      • Reviewing contractual arrangements to ensure such agreements include appropriate obligations and termination rights.
      • Assessing the processes and training in place at those organisations.
      • Reviewing and monitoring the well-being of staff to identify individuals who may be at a higher risk of committing fraud because of stress, workloads or targets.
  5. Communication and Training
    • Ensure anti-fraud policies are well communicated and understood across the organisation and the awarding organisation’s delivery network.
    • Provide tailored training for staff and delivery partners, especially those in high-risk roles.
    • Reinforce whistleblowing procedures and ensure that these are communicated to staff at delivery partners.
  6. Monitoring and Review
    • Monitor the effectiveness of fraud prevention measures through:
      • Data analytics
      • Internal audits
      • Feedback from staff and centres
      • Lessons from investigations or whistleblowing
    • Review procedures at least every two years or sooner if risks change.

What’s next?

In addition to the steps above, awarding organisations should ensure that there are appropriate agreements in place with each delivery partner – including centres, resellers, agents and end-point assessors. If there is not currently an agreement in place then look to put one in place as soon as possible.

If you already have agreements in place then consider whether it already contains appropriate anti-fraud provisions, and if not look at amending the agreement as soon as possible.

If you need any assistance or have any questions on the above, please do get in touch with a member of the Bates Wells team.

The material in this article is provided for guidance and general information only and is not intended to constitute legal or other professional advice upon which you should rely. In particular, the information should not be used as a substitute for a full and proper consultation with a suitably qualified professional. Please do contact the Bates Wells team if you require further information.