FTPF (Failure to Prevent Fraud) Definition

Historical Context: From Bribery to Full Fraud Prevention

The FTPF law evolved from the UK Bribery Act 2010 and reflects the growing global trend of corporate accountability. High-profile scandals—from Enron to Wirecard—showed that poor governance and weak internal controls can devastate not only a company but also the broader economy. In response, regulators expanded liability to prevent companies from turning a blind eye to misconduct.

In 2023, the Economic Crime and Corporate Transparency Act introduced FTPF, underscoring that ethical leadership is no longer optional—it’s required. This aligns closely with Emtrain’s belief that ethics and compliance are not just checkboxes but culture-driven competencies that shape organisational trust.

Workplace Scenarios: When Internal Controls Fail

Fraud often hides in plain sight—through everyday shortcuts, rationalisations, and overlooked “minor” infractions. These real-world examples illustrate the importance of proactive prevention:

• Falsifying Expense Reports
  An employee slightly inflates travel costs to meet budget pressures. Leadership ignores it as “harmless,” but under FTPF, the company could still face prosecution for failing to prevent the fraud.
• Revenue Manipulation
  A sales executive fabricates client contracts to boost quarterly results. The company benefits—until auditors uncover the deception. Lack of training and oversight triggers corporate liability.
• Vendor Overbilling
  A procurement manager approves inflated invoices from a preferred supplier. Poor segregation of duties and absence of reporting channels create legal exposure under FTPF.
  

Each example underscores a critical lesson: there is no such thing as “small fraud.” Every act of dishonesty erodes trust, damages culture, and can expose your organisation to prosecution.

Solution: Train your employees skills to prevent false expenses with Emtrain’s Microlesson on Bribery and Expense Reports

What You Can Do: Strengthen Your Fraud Prevention Framework

For HR managers, compliance officers, and people leaders, the FTPF standard is both a challenge and an opportunity. It demands a holistic approach to ethical culture, compliance training, and accountability.

1. Deliver Continuous Ethics Education
   Start with Emtrain’s foundational programs:
   • Global Anti-Bribery and Corruption (FCPA) Training
   • Code of Conduct Training
   • Anti-Money Laundering
2. Enable Employee Reporting Channels
   Implement secure whistleblowing systems and promote psychological safety with Emtrain’s Whistleblower Training.
3. Embed Culture Metrics in Compliance
   Use Emtrain Intelligence to measure sentiment, identify risk patterns, and ensure your team’s values align with compliance goals.
4. Promote Manager Accountability
   Equip people leaders with tools to recognise red flags in leadership, respond effectively, and model integrity in their teams.
   

Best Practices: Embedding Integrity in Everyday Decisions

Building resilience against fraud requires more than policies—it requires consistent culture reinforcement.

1. Lead from the Top
   Executives must communicate that ethics drive business performance. Tone-from-the-top shapes behaviour and signals that misconduct will not be tolerated.
2. Make Compliance Conversational
   Replace one-time training with microlearning moments that connect complex laws to practical, real-world examples.
3. Empower Early Detection
   Encourage team members to speak up before issues escalate. Transparency and trust are your strongest defences.
4. Audit and Update Regularly
   Fraud risks evolve. Continuous improvement of internal controls ensures compliance programs stay relevant.
   

External resource: U.S. Department of Justice – Evaluation of Corporate Compliance Programs

Final Thoughts: From Compliance to Culture

Failure to Prevent Fraud (FTPF) isn’t just a compliance requirement—it’s a wake-up call for ethical leadership. The law formalises what many organisations already know: fraud prevention starts with culture. By combining legal diligence with people-first compliance, companies can transform accountability from a burden into a strategic advantage.

• For HR Managers, this means aligning behaviour with policy.
• For Compliance Officers, it’s about proving reasonable procedures.
• For People Leaders, it’s ensuring every employee understands how integrity impacts business success.

Emtrain’s Failure to Prevent Fraud (FTPF) Microlesson brings this concept to life, helping learners see their role in safeguarding the organisation from fraud and reinforcing that every act of honesty strengthens the workplace. Through Emtrain’s integrated training and intelligence tools, you can build a culture that doesn’t just prevent fraud—it prevents reputational, financial, and ethical collapse.

Video Preview: “You Can Expense It”

A woman sales representative is about to close a major deal when her client suggests they meet for dinner to finalize the contract, adding, “You can just expense it.” She hesitates—her husband dislikes nighttime business meetings—and politely declines, offering instead to send the statement of work and meet at his office the next day. Later, she discusses the situation with her sales manager. The manager, focused on closing the deal, suggests she take the client out for a drink to move things along. She explains that the client has been overly forward with her, making her uncomfortable. The manager acknowledges that the client’s behavior is inappropriate but, instead of addressing the issue directly, quietly reassigns the deal to another colleague. The rep is left in disbelief, losing her biggest client because she chose integrity over pressure.

This scene highlights how management decisions made in “good faith” can still perpetuate ethical blind spots, undermining fairness, culture, and trust. It’s a reminder that compliance isn’t just about following the law—it’s about standing up for integrity and preventing silent misconduct that can damage both individuals and the organisation’s reputation.