Business blames bizzies for climbing crime costs

Online fraud is costing small businesses an average of £800 a year - and it's partly down to the police...

Last Updated: 31 Aug 2010

That’s the conclusion of the latest report from the Federation of Small Businesses, which found that some of its members were swindled out of sizeable sums over the internet last year – an average of  £768 per company, in fact. Online criminals are clearly getting increasingly imaginative – but the more alarming point is that small businesses don’t usually bother reporting these crimes, either because they don’t know how or they don’t see the point…

The principal tactics for online ne’er-do-wells are seemingly phishing emails (cited by 37% of respondents), card-not-present fraud (cited by 15%) and IT problems caused by viruses or hackers (another 15%). All in all, the business surveyed said this had cost them between £500 and £5,000 (possibly depending how gullible they were). That's money that they really can’t afford to be losing when things are as tough as they are at the moment.

Now you’d think that every victim’s first reaction would be to get straight on the phone to the local constabulary. But apparently not. One-third don’t bother even reporting it because they don’t have any trust in the system. The major problem seems to be a practical one: 53% say they need clearer information about how to report such crimes, with 44% demanding a specific police contact to deal with this particular area. The FSB is now throwing its weight behind these calls, arguing for a better-advertised central reporting centre to make life easier for small businesses.

And there is a precedent: Wales already has a specific reporting centre to gather complaints about e-crime and target cyber-criminals. Admittedly you’d rather expect Wales to be well-resourced in this area, given that the public sector accounts for about two-thirds of the Welsh economy and employs one-third of the workforce. Nonetheless, it’s still a good idea, and 85% of FSB respondents felt that England and Scotland should now follow suit.

So what would this look like? Well, much like the National Fraud Reporting Centre that’s due to open later this year, presumably, whose remit will include cyber-crime. What's more, the Metropolitan Police has also just set up a Central E-Crime Unit, which will no doubt also have an input. So it sounds like the FSB is preaching to the converted...

In today's bulletin:

RBS and Lloyds to add £1.5trn to national debt
UBS coughs up names and cash in US tax probe
B&Q UK slide drags down Kingfisher sales
Business blames bizzies for climbing crime costs
Employers worried about their health, not safety

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