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Small firms lose up to £800 million to cyber crime, says FSB

Posted on 24 May 2013

In a new report, Cyber security and fraud: the impact on small businesses, the FSB has partnered with the Home Office and the Business Department to look at issues affecting small firms

New research from the Federation of Small Businesses (FSB) shows that cyber crime costs its members around £785 million per year as they fall victim to fraud and online crime.

The report shows that 41 per cent of FSB members have been a victim of cyber crime in the last 12 months, putting the average cost at around £4,000 per business. Around three in 10 members have been a victim of fraud, typically by a customer or client (13%) or through ‘card not present' fraud (10%).

For the first time, the FSB has looked at the impact that online crime has on a business. The most common threat to businesses is virus infections, which 20 per cent of respondents said they have fallen victim to; eight per cent have been a victim of hacking and five per cent suffering security breaches.

The FSB is concerned that the cost to the wider economy could be even greater as small firms refuse to trade online believing the security framework does not give them adequate protection. Indeed, previous FSB research shows that only a third of businesses with their own website use it for sales.

The report finds that almost 20 per cent of members have not taken any steps to protect themselves from a cyber crime. However, 36 per cent of respondents say they regularly install security patches to protect themselves from fraud and almost six in 10 members regularly update their virus scanning software to minimise their exposure to online crime.

In response to this, the FSB has developed 10 top tips for small firms to make sure they stay safe online.

Launching the report at an event in London today, Mike Cherry, National Policy Chairman, Federation of Small Businesses, said:

"Cyber crime poses a real and growing threat for small firms and it isn't something that should be ignored. Many businesses will be taking steps to protect themselves but the cost of crime can act as a barrier to growth. For example, many businesses will not embrace new technology as they fear the repercussions and do not believe they will get adequate protection from crime. While we want to see clear action from the Government and the wider public sector, there are clear actions that businesses can take to help themselves.

"I encourage small firms to look at the 10 top tips we have developed to make sure they are doing all they can. We want to see the Government look at how it can simplify and streamline its guidance targeted specifically at small firms and make sure there is the capacity for businesses to report when they have been a victim of fraud or online crime."

 

Source: FSB