Small businesses exposed by online crime

More than half of small firms were targeted by fraudsters last year

Online crime is costing small businesses £800 a year on average, according to research from the Federation of Small Businesses (FSB).

Fifty-four per cent of small firms said they were a victim of crime last year, according to the Inhibiting Enterprise: Fraud and online crime against small business report.

About a third of respondents reported problems with phishing emails, 15 per cent said they were victims of card-not-present fraud, and another 15 per cent complained of IT problems caused by viruses and hackers.

Most fraud costs small businesses between £500 and £5,000, while the average cost across the sector is £768 a year, said the FSB.

There was also a clear message from small firms that the current fraud reporting system is inadequate.

One third of respondents said they do not report fraud or online crime to the police or their banks because of a lack of faith in the system.

In addition, 53 per cent said they needed clearer information about how and where to report this type of crime, while 44 per cent said needed a specific fraud and online crime contact in their local police force.

Mike Cherry, chairman of home affairs at the FSB, said businesses are being left exposed. He added that the forthcoming Police Central E-crime Unit and the proposed Nation Fraud Reporting Centre will need to work closely if they are to set up an effective intelligence gathering system.

“E-crime is becoming an increasingly serious issue for small firms, which are losing up to £800 a year to fraud and online crime – a cost which could have a significant impact on a small business," said Cherry.

“The internet is a huge and unregulated area, but businesses need to have confidence that there are at least some structures there to support them."