Small firms warned over exposure to cyber crime

Identity fraud, or cyber crime, is one fast-growing business the UK economy could well do without, yet small to medium-sized enterprises (SMEs) are increasingly falling victim to it.

A report last month by 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.

It also showed 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%).

Sadly, it is small businesses that are often in the sights of fraudsters. High profile brands do not offer the same level of anonymity to thieves that SMEs do, while big companies are also likely to have more strict controls in place to detect and deny unauthorised transactions.

And a common misconception is that identity fraud is only used to directly access bank accounts. However, by simply hacking into an email address or using counterfeit information, fraudsters can attempt to do everything from re-route direct debits and foreign exchange payments to purchase goods, hire cars or even register new businesses – racking up debts and responsibilities under the name of their victims.

While strict laws are in place to try and stop fraudsters before the damage is done, SMEs can protect themselves by being proactive in managing their risk: both from vulnerabilities in their own communications to those of clients placing orders. Regularly monitoring sent items from email accounts, carefully reviewing incoming invoices and taking due care to confirm incoming orders take mere minutes at the time, but could just help catch a would-be thief before they make off with the business’ hard-earned profits.