Cyber Crime Costing Small Businesses Millions

FSB Report - Cyber Security and FraudThe latest research indicates that cyber crime is costing small businesses an average of around £4,000 every year…

A new report from the Federation of Small Businesses (FSB) and the Department for Business, Innovation and Skills (BIS) has revealed that small firms are increasingly under threat from cyber crime.

In a survey of 2,667 FSB members some 41 per cent had been victim to cyber crime within the last 12 months.

Those small businesses had lost an estimated £785 million a year as a result of online crime.

Thirteen per cent of the FSB members surveyed reported that they had been victims of fraud by customers or clients and ten per cent had fallen foul of "card not present" credit crimes.

Looking at the impact of cyber crime on small businesses the FSB found that the common threat was from computer viruses with twenty per cent of respondents saying they had suffered virus infections.

Other small businesses reported that they had been hacked (8%) and five per cent had suffered other IT security breaches.

Cost to the Wider Economy

The FSB looked at the cost to the wider economy of small businesses being increasingly targeted by cyber crime and found that some firms had even refused to trade online for fear of the risks.

Worryingly, the report found that nearly twenty percent of its members had done nothing to protect themselves from cyber threats.

On the plus side, thirty six per cent of small businesses were regularly installing security patches to keep their systems up-to-date and sixty per cent were conducting regular virus scans.

Mike Cherry, National Policy Chairman at the Federation of Small Businesses said of the report:

“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.”

Talking about whether there should be more done by central government to protect small businesses, Cherry added:

“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.”

James Brokenshire, MP Parliamentary Under Secretary for Security, Home Office, said:

“Having personally been involved in the cyber security debate for several years now, I am pleased that the Home Office is working with the FSB to highlight the current experiences of small businesses.”

“Cyber security is a crucial part of the Government’s National Cyber Security Strategy and we need to make sure that all businesses, large and small are engaged in implementing appropriate prevention measures in their business. This report will help give a greater understanding of how online security and fraud issues affect small businesses, giving guidance as well as valuable top tips to protect their business."

David Willetts, MP Minister for Universities and Science, Department for Business, Innovation and Skills added:

“The Department for Business, Innovation and Skills (BIS) published guidance in April 2013, ‘Small businesses: what you need to know about cyber security’, based on our comprehensive ‘10 Steps to Cyber Security’ guidance. This guidance sets out the current risks, how to manage these, and plan implementation of appropriate security measures.”

“We know only too well of the importance of securing buy-in from both big and small business in implementing appropriate protection against cyber risks – business success can depend on it. Increasing security drives growth.”

The FSB’s Mike Cherry concluded by saying:

“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.”

Top Ten Tips to Protect Your Business From Cyber Crime

  1. Implement a combination of security protection solutions (anti-virus, anti-spam, firewall etc)
  2. Carry out regular security updates on all software and devices.
  3. Implement a resilient password policy
  4. Secure your wireless network
  5. Implement clear and concise procedures for email, internet and mobile devices
  6. Train staff in good security practices and consider employee background checks
  7. Implement and test backup plans, information disposal and disaster recovery procedures
  8. Carry out regular security risk assessments to identify important information and systems
  9. Carry out regular security testing on the business website
  10. Check provider credentials and contracts when using cloud services

You can read the full FSB report Cyber Security and Fraud: The impact on small businesses here.

Small businesses can report fraud at ActionFraud.

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Read more in our business advice article Cyber Crime, E-risks and Professional Indemnity Insurance.

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