Cybercrime consequences

The Federation of Small Businesses' (FSB) research into business crime unveils a distressing landscape for small businesses in England and Wales, compounded by a surge in both physical and cybercrimes over the last two years. Cracking the Case, published in December, estimates that 81 percent of small businesses have been impacted by at least one crime since January 2021. This a significant increase from the 49 percent reported between 2017-2019. The financial burden of traditional crime is considerable. More than half of these businesses (56 percent) have faced losses exceeding £1,000, while 33 percent have incurred losses of up to £1,000. The situation is worse for one in ten businesses, who have lost over £10,000.

FROM CYBERCRIME TO SHOPLIFTING
The nature of these crimes varies. Traditional crimes, experienced by 35 percent of businesses, include vandalism (34 percent) burglary (30 percent), and theft by external parties (29 percent). The report also highlights a rise in organised shoplifting and threatening behaviour towards staff. Fraud is another significant challenge, with 37 percent of businesses encountering it. This has cost 44% of the victims up to £1,000, while 39 percent have lost more than £1,000 and 8 percent over £10,000. The most common types of fraud are invoice fraud (31 percent), card/cheque fraud (29 percent), and unauthorised bank transactions (26 percent). Cybercrime is rampant, with 72 percent of small businesses affected, mainly by phishing (92 percent). Other threats include malware attacks and social media account hacking, each affecting about one in ten businesses. Financial losses mirror those of fraud, with 44 per cent losing up to £1,000, 33 percent over £1,000 and six percent over £10,000. Despite preventative measures, with 65 percent of businesses upgrading security against traditional crimes and 92 percent against cybercrime, the response to these incidents remains lacklustre. Only 66 percent of businesses report the most impactful crimes, with a mere 30 percent reaching out to the police. Among those that do, 59 percent report no police attendance at the scene, and 48 percent believe there was no follow up investigation. Only three percent saw the perpetrators identified and arrested.

DEDICATING APPROPRIATE RESOURCES
Cracking the Case calls for urgent action. This includes prioritising business crime in Police and Crime Commissioners' manifestos and introducing a separate offence for violence against retail workers. There is also currently an impression that shoplifters will not be arrested if they steal under £200 worth of goods, something the Home Office needs to correct. This will send a clear message that lower value organised shoplifting will not be tolerated. For cybercrime and fraud, the proposal is to view Cyber Essentials certification pricing for small businesses, and the Home Office should include the impact of fraud in its next fraud strategy. There also needs to be an increase in the average number of police officers in England and Wales to 335 per 100,000 people, to help dedicate appropriate resources for crime against businesses, including cybercrime and fraud.

WAKE-UP CALL The findings of our report are a wake-up call, highlighting the need for a united front against these crimes, integrating efforts from the police, the Home Office and the Police and Crime Commissioners. It's time to shift the narrative to ensure that small businesses can operate in a safe and secure environment, something that's crucial for the growth and prosperity of our economic landscape.

ABOUT FSB
As the UK's business support group, FSB is the voice of the UK's small businesses and the self-employed. Established over 40 years ago to help its members succeed in business, FSB is a non-profit making and non-party political organisation that's led by its members, for its members. As the UK's leading business campaigner, FSB is focused on delivering change which supports smaller businesses to grow and succeed. FSB offers members a wide range of vital business services, including access to finance, business banking, legal advice and support along with a powerful voice in Government. Each year FSB also runs the UK's Celebrating Small Business Awards. More information is available at www.fsb.org.uk. You can follow us on twitter @fsb_policy and on Instagram @fsb_uk.