The UK’s Fraud Crackdown: What It Means for Pet and Equine Insurance

The UK’s Fraud Crackdown: What It Means for Pet and Equine Insurance

From September 2025, the Economic Crime and Corporate Transparency Act (ECCTA) introduces a new corporate criminal offence: Failure to Prevent Fraud (FTPF). Alongside reforms to the identification principle, these changes will significantly affect how organisations in the pet and equine insurance sector manage fraud risk.

Fraud in this market is not new; from inflated costs to duplicate or exaggerated claims, it poses a significant challenge that drives up premiums and undermines trust. What is new is the lower bar for prosecution and the widened scope of liability.

Why the sector should take notice

1. The value chain is vulnerable

Pet and equine insurance involves insurers, MGAs, brokers, TPAs, service providers and veterinary practices working closely with insurers on claims. Under ECCTA, all of these are “associated persons.”

• If a broker misrepresents a product to secure commission…
• If treatment costs are incorrectly presented or exaggerated in a claim…
• If a claims handler misstates information in settlement…

…then the organisation they are connected to could face prosecution if adequate prevention procedures were not in place.

2. Corporate liability is wider than before

A conviction no longer requires proof that senior leaders knew about the fraud. Even if the fraudster’s motive was personal, liability may still apply if the organisation gained any indirect benefit — or even if no benefit was realised.

3. Multinationals are in scope

Fraud committed in the UK by overseas groups (for example, global capacity providers or veterinary consolidators) could lead to prosecution of the parent company.

4. Regulators are already circling

The CMA review of veterinary services and the FCA’s Consumer Duty focus on value and fairness are already putting pressure on this sector. A fraud conviction would only accelerate reputational and regulatory risk.

What prevention looks like

The government’s guidance is clear: a box-ticking approach will not be enough. Organisations must show that reasonable prevention procedures were in place, tailored to the risks they face. For our sector, that means:

• Risk assessments specific to vet fee inflation, mis-selling, and fraudulent claims.
• Clear governance, with a senior leader responsible for fraud risk.
• Training and awareness for staff, brokers, and suppliers.
• Due diligence on third parties, including veterinary practices, distributors, service providers, and claims partners, recognising the critical role they play in ensuring transparency.
• Validation and KYC checks on policyholders, an area where pet insurance currently lags behind other lines, with minimal steps taken to verify the individual at the point of sale.
• Validation of pet information and use of microchips, ensuring animals are correctly identified. This opens wider questions about the effectiveness of current databases and whether the sector should push for a centralised, reliable system.
• Contractual protections in TOBAs and supplier agreements to reinforce fraud prevention obligations.
• Ongoing monitoring and updates as fraud risks evolve.

The bigger picture

Fraud is on the rise, and its proceeds often fuel wider criminal activity. ECCTA represents a shift towards proactive prevention, making it easier to prosecute organisations that fail to act.

For the pet and equine insurance sector, this is both a challenge and an opportunity:

• A challenge, because the fragmented value chain and high fraud risk make exposure significant.
• An opportunity, because robust fraud prevention can protect consumers, strengthen trust, and demonstrate that the sector is serious about sustainability.

At PEIA, we believe that tackling fraud is not only a compliance obligation but a cornerstone of making insurance sustainable for pet and horse owners alike.

Co-authored by Sharon Brown, CEO of the Pet and Equine Insurance Association, and Karl Pearse, Senior Customer Partnership Manager, CRIF.