Last week signalled the introduction of the new Failure to Prevent Fraud (FTPF) offence across the UK, a development that could have serious consequences for Scottish businesses that are not prepared.
The legislation makes large organisations criminally liable if an employee, or anyone acting on their behalf, commits fraud to benefit the business and the company cannot show it had reasonable prevention procedures in place.
Put simply, it removes the defence of ignorance. If fraud occurs, the onus will be on the business to prove it had safeguards, policies and training in place.
The new legislation is a significant shift. It closes the loophole that allowed organisations to claim they did not know what employees or agents were doing. From now on, lack of awareness will not be an excuse.
Unfortunately, this is the kind of compliance work that often slides down the priority list. For many Scottish firms, fraud prevention may feel like a box-ticking exercise for a risk they assume won’t apply. But ignoring it could now leave many dangerously exposed.
A survey by law firm Dentons earlier this year found that 30 per cent of Scottish companies had not appointed anyone to oversee FTPF compliance. Even among those that had, 78 per cent admitted they had not completed a fraud risk assessment, despite it being central to Government guidance. This certainly suggests to me a worrying lack of readiness across the board.
The guidance calls for thorough risk assessments, proportionate controls and due diligence, clear and ongoing training, plus monitoring and review processes. These are not once-and-done actions for businesses, but ongoing responsibilities.
The good news is the legislation does not apply to every company. To qualify as a “large organisation” you must meet at least two of the following criteria – more than 250 employees, turnover above £36 million, or assets over £18 million.
For smaller firms the pressure is much less, though many will still want to adopt elements of best practice voluntarily, as it will certainly help in the long term.
For those in scope, however, failing to act is not an option. Prevention procedures may not eliminate fraud, but they demonstrate reasonable steps were taken, which could make all the difference if any wrongdoing comes to light.
Unfortunately, Scottish examples are not hard to find. Just this June, Thomas Robinson was jailed for selling Italian tea as Scottish between 2014 and 2019, deceiving luxury hotels, retailers and genuine growers, earning him the unfortunate moniker of Tetley Tam within the media.
Further back came the “black fish” scandal, where Shetland skippers and a processing company tampered with weighing equipment so catches of mackerel and herring appeared smaller than they were, allowing them to breach EU quotas and sell the excess illegally. The fraud led to heavy fines and was condemned by the courts as a “shameful episode” for the fishing industry.
At a UK-wide level, Patisserie Valerie remains the starkest example. Four former finance team members face trial in 2026 accused of inflating cash reserves by £94 million between 2015 and 2018. The fraud created a massive accounting black hole and pushed the company into administration. Before the collapse, the business appeared to be thriving, shares were strong, and executives sold £13 million worth of stock. Neither the directors nor auditors spotted what was happening.
High-profile cases like these explain why the UK Government has acted. The FTPF offence is designed to ensure larger businesses have the right checks and training in place – and to hold them accountable if they don’t.
Ultimately though, no business can control every action of its employees, contractors or partners. But they can put robust measures in place to reduce the risk. The new offence is a clear signal that the Government expects them to do exactly that.
Fraud prevention may not feel urgent, until the moment it is. And by then, it’s too late. So it will be interesting to see how this new legislation will impact businesses moving forward.
Side (249 words)
Scotland has never been short of entrepreneurial flair, and Scots firm, Zudu, is the latest reminder that innovation and ambition are alive and well in the tech sector.
Founded just over a decade ago by James Buchan, the Edinburgh-based digital transformation specialist has quietly grown from a start-up into a company with an impressive client list that includes Weir Group, ScotRail, the Scottish Government and the NHS.
In the past year alone, Zudu has doubled its headcount to 24 and is forecasting double-digit revenue growth to £3.5m in 2025, with an ambitious £10m target by 2027.
The fuel behind that growth? You guessed it, a rising demand for AI-enabled technology. That said, Zudu’s message is refreshingly clear. For James and his team, AI isn’t just a buzzword; it needs to be integrated responsibly, at scale, and in ways that keep people at the heart of progress. That commitment to being “relentlessly human” in a digital world feels exactly the right approach.
What also stands out is not just the scale of the ambition, but the calibre of leadership Zudu has assembled. The arrival of Paul Duffy as managing director, alongside new directors Laura McTurk and Angus Turner, and the strategic insight of Iain Valentine, marks a step-change in the company’s journey.
Scotland has a proud track record of producing world-class software companies, and it is encouraging to see firms like Zudu pushing the boundaries of what’s possible while riding the crest of the AI wave sweeping the business world.
Laugh (115)
Trust a Glaswegian to back a brewery half a world away. Always a good nose for a decent pint, whether it’s in the West End or the West Bank. Taybeh Brewing Co., Palestine’s pioneering microbrewery, has teamed up with Glasgow’s own Brewgooder to launch Sun & Stone lager in the UK.
It’s a story that somehow manages to mix resilience, solidarity and beer – raising a glass together, supporting small business and making a splash in the Scottish market at the same time.
There’s something fitting that even in the hardest places on earth, Glaswegians will still find a way to raise a cheer.
I say Slàinte to that, or maybe that should be fi sahtak!
Weep (117)
A Scotland without water for whisky. Now there’s a sobering thought.
The industry worries about international rivals, tariffs and shifting consumer tastes, but perhaps the biggest threat to our national drink is closer to home – access to water itself.
The Scottish Environment Protection Agency recently declared eight catchment areas at “significant scarcity” after weeks of dry weather. Among them is the River Spey, spiritual home to so many distilleries, where restrictions on water use have now been imposed. Farmers too are feeling the squeeze.
We might joke about how wet Scotland always seems, but the truth is simple. Without fresh water, there is no world-beating whisky.
Now that’s a dry pill for us all to swallow.
