Small businesses ‘lose £800 a year’ to fraud

Small firms may be losing up to £800 a year to fraud and online crime, a new study has claimed.

According to a report by the Federation of Small Businesses (FSB), where fraud has a financial impact, it costs small enterprises between £500 and £5,000. This equates to an average annual cost of £768 across the sector.

The study, entitled ‘Inhibiting Enterprise: Fraud and online crime against small businesses,’ also found that 54% of firms questioned had reported being a victim of crime in the last twelve months.

Of these, 37% said they had experienced problems with phishing emails, while 15% claimed to have suffered losses from card not present fraud. A further 15% of businesses had encountered IT problems caused by viruses and hackers.

Despite this, researchers found that one third of small firms do not report such incidences to the police or their banks because of a lack of faith in the 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,’ said Mike Cherry, FSB Home Affairs Chairman.

‘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.’

The FSB is now calling on the Government to introduce a range of measures to tackle crime against business, including the development of a central and accessible method of reporting fraud.