FSB: Online crime and fraud costs small businesses £800 each year

Online crime and fraud costs small businesses £800 each year, says FSB

Small businesses lose up to £800 a year to fraud and online crime, according to a survey by the Federation of Small Businesses (FSB), which is calling for more action to tackle online crime.

More than half (54 per cent) of businesses reported being a victim of crime in the last twelve months – 37 per cent having problems with phishing emails, 15 per cent falling victim to card not present fraud and another 15 per cent falling foul of IT problems caused by viruses and hackers.

Most fraud, where it has a financial impact, costs small businesses between £500 and £5,000, while the average cost across the sector is £768 a year.

The FSB’s report, “Inhibiting Enterprise: Fraud and online crime against small businesses”, found that one third of small firms do not report fraud or online crime to the police or their banks because of a lack of faith in the system.

More than 50 per cent (53 per cent) indicated they needed clearer information about how and where to report this type of crime, while 44 per cent wanted a named contact in their local police force specifically focused on fraud and online crime.

An 85 per cent majority of businesses in Scotland and England said they would report fraud if a designated reporting centre were set up to gather data and use it to fight the crime and follow through with prosecutions – following in the footsteps of Wales, which already has a reporting centre.

The FSB is calling for:

– A central, well advertised and accessible method of reporting fraud and e-crime, which they can trust to understand the issue and to take proper follow up action;

– The Police Central E Crime Unit and the National Fraud Strategic Authority, which aim to launch the National Fraud Reporting Centre later this year, to work together closely to ensure that the centre is established soon and fulfils these criteria;

– A local police contact to specialise on fraud and e-crime with small businesses; and

– Banks to take responsibility for informing businesses up front about the risks of card not present fraud.

Mike Cherry, Federation of Small Businesses Home Affairs Chairman, said:

“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.

“The internet is a huge and unregulated area but businesses have to have confidence that there are at least some structures there to support them. It is important that the Met Police E Crime Unit and the National Fraud Reporting Centre must work hand in hand to set up an effective system to gather intelligence and use it to investigate and prosecute when this crime occurs. Businesses are currently simply being left very exposed.”

ENDS

Notes to Editors

The FSB is the UK’s leading business organisation with over 215,000 members. It exists to protect and promote the interests of the self-employed, and all those who run their own business. More information is available at www.fsb.org.uk
For a copy of the report, Inhibiting Enterprise: fraud and online crime against small businesses, email sophie.kummer@fsb.org.uk

Contacts:

Stephen Alambritis: 020 7592 8112/07788 422155
Sophie Kummer: 020 7592 8128 /07917 628 998
Prue Watson: 020 7592 8121/07825 125695
Marc Shoffman: 020 7592 8113/07595 067068