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Cybercrime losses tax UK small business

Exposed SMEs call for reporting security blanket

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Cybercrime and fraud are costing Britain's small business £800 a year each, according to a survey by the UK's Federation of Small Businesses (FSB).

The SME lobbying group is calling for more action to tackle online crime as a response. More than half (54 per cent) of smaller businesses polled in the survey said they were a victim of crime in one way or another over the last 12 months – 37 per cent reported problems with phishing emails, 15 per cent were affected by credit card fraud (eg chargebacks for fraudulent internet transactions) and another 15 per cent fell foul of security problems caused by viruses and hackers.

Reported losses as a result of fraud ran between £500 and £5,000, while the average cost across the SME sector is £768 a year. The study found that one third of small business fail to report fraud or online crime to the police or their banks because they lack confidence in the system.

Half (53 per cent) said a clear cybercrime reporting structure was needed, while 44 per cent wanted a named contact in their local police force to deal with online fraud and crime reports. The survey reflects a widespread discontent about reporting structures in the business community that has existed since at least 2006, when the National Hi-Tech Crime Unit was borged into SOCA. The government has finally responded to complaints about cybercrime reporting with the creation of the Police Central E-Crime Unit (PCeU).

The FSB survey found that 85 per cent of the sample of small businesses in Scotland and England surveyed would report fraud if a designated reporting centre were set up to collect intelligence and launch prosecutions.

The small business lobby group is calling for the Police Central E-Crime Unit and the National Fraud Strategic Authority, which are due to launch the National Fraud Reporting Centre later this year, to work together closely to ensure they establish a "central, well advertised and accessible method of reporting fraud and e-crime". It also wants to see local police contacts who specialise in fraud and e-crime involving small businesses and action by banks in making sure merchants are clear 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... Businesses are currently being left very exposed," he added.

The FSB, which has 215,000 members among small businesses and the self-employed, has produced a paper on the issue, entitled Inhibiting Enterprise: fraud and online crime against small businesses, which can be downloaded here (PDF). ®

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