UK Debt Recovery in 2025: What Business Insolvencies Are Really Telling Us
Since 1 September 2025, UK businesses operate under a sharper legal spotlight when it comes to fraud and debt recovery. A law known as the “failure to prevent fraud” offence (from the Economic Crime and Corporate Transparency Act 2023) now holds companies legally accountable when someone in their orbit — a contractor, agent, supplier or otherwise — commits fraud that benefits the business. The only way to avoid legal liability is by demonstrably having reasonable procedures in place to prevent that fraud.
This change isn’t just legalese. For anyone chasing payments, managing credit control, or dealing with enforcement, it introduces a new level of risk. It means your contracts need clauses that spell out who’s responsible for fraud‑related matters, your oversight of third parties needs to be tighter, and your internal controls need to be up to scratch. What was “good enough” before might no longer be.
Alongside that legal shift, recent stats from the Insolvency Service show that company insolvencies in England & Wales for July 2025 are rising — barely, but clearly. Compared to June, there’s been a small increase; compared to the same month last year, the rise is more noticeable. Notably, the route of forced failures (compulsory liquidations, administrations) is becoming more common, while more collaborative or voluntary rescue options (CVAs, etc.) are receding.
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For creditors or collection agencies, this means:
- Speed matters. The earlier you detect potential issues, the more options you have. Once a customer heads toward administration or liquidation, your recovery rates tend to drop.
- Contracts are your frontline. Make sure supplier, contractor and customer contracts have clear fraud‑prevention clauses, warranties, liability for dishonest behaviour, and provisions for auditing.
- Internal oversight and fraud policies need beefing up. Risk maps, internal audits, supplier reviews, whistleblowing mechanisms, and monitoring of associated persons are no longer optional extras.
There’s also an intersection with sanctions, regulatory risk and how courts decide on obligations when those come into play. Some upcoming litigation will test how payment obligations, letters of credit, and contract terms are interpreted under sanctions or regulatory pressure.
What’s the roadmap?
- Audit your current fraud prevention and compliance programme. Identify gaps, especially with third parties.
- Train your credit, legal, collections teams in what “reasonable procedures” look like in practice.
- Keep a close watch on insolvency data in your customer base and suppliers. Tools that monitor financial health can give early warnings.
- Build your enforcement strategy now — documentation, contracts, legal readiness. Athena Collections can assist in preparing or executing recovery efforts when voluntary cooperation fails.
If you combine robust controls with proactive monitoring and strong contracts, you’ll preserve more value, reduce risk, and make collections and enforcement more effective — even in tougher conditions.
Final Thought
If your recovery processes only work when everything goes to plan… they don’t really work. 2025 is proving that fast, ethical, intelligence-led debt collection is not just nice to have—it’s a strategic advantage.
Want to find out if your current approach can survive the next sector shock? Let’s talk.
Contact Athena Collections if you intend using a Debt Collection Agency
Outsource Debt Collection; call Athena Collections on 0203 865 9319 or use our simple online contact form. Our experienced Debt Collections Team can assist you with using Debt Collection Agencies, so please do not hesitate to contact our team on 0203 865 9319.
