Cybercrime losses tax UK small business

Exposed SMEs call for reporting security blanket

Cybercrime and fraud are costing Britain's small business £800 a year each, according to a survey by the UK's Federation of Small Businesses (FSB).

The SME lobbying group is calling for more action to tackle online crime as a response. More than half (54 per cent) of smaller businesses polled in the survey said they were a victim of crime in one way or another over the last 12 months – 37 per cent reported problems with phishing emails, 15 per cent were affected by credit card fraud (eg chargebacks for fraudulent internet transactions) and another 15 per cent fell foul of security problems caused by viruses and hackers.

Reported losses as a result of fraud ran between £500 and £5,000, while the average cost across the SME sector is £768 a year. The study found that one third of small business fail to report fraud or online crime to the police or their banks because they lack confidence in the system.

Half (53 per cent) said a clear cybercrime reporting structure was needed, while 44 per cent wanted a named contact in their local police force to deal with online fraud and crime reports. The survey reflects a widespread discontent about reporting structures in the business community that has existed since at least 2006, when the National Hi-Tech Crime Unit was borged into SOCA. The government has finally responded to complaints about cybercrime reporting with the creation of the Police Central E-Crime Unit (PCeU).

The FSB survey found that 85 per cent of the sample of small businesses in Scotland and England surveyed would report fraud if a designated reporting centre were set up to collect intelligence and launch prosecutions.

The small business lobby group is calling for the Police Central E-Crime Unit and the National Fraud Strategic Authority, which are due to launch the National Fraud Reporting Centre later this year, to work together closely to ensure they establish a "central, well advertised and accessible method of reporting fraud and e-crime". It also wants to see local police contacts who specialise in fraud and e-crime involving small businesses and action by banks in making sure merchants are clear up front about the risks of card not present fraud.

Mike Cherry, Federation of Small Businesses home affairs chairman, said: "E-crime is becoming an increasingly serious issue for small firms, which are losing up to £800 a year to fraud and online crime – a cost which could have a significant impact on a small business.

"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... Businesses are currently being left very exposed," he added.

Source: The Register (Feb 2009)

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Home Sec: No more funds to e-crime unit

Cybercrumbs from the table

The newly established Police Central e-crime Unit is unlikely to get increased UK government funding, according to a response to questions in the House by the Home Secretary on Tuesday. The reply by Jacqui Smith is a sign that the present home secretary is less inclined to invest in the nascent unit than her predecessor David Blunkett.

Liberal Democrat MP Chris Huhne asked Jacqui Smith about whether "she will make an assessment of the adequacy of the IT resources provided to Metropolitan Police officers in policing fraud". The Home Secretary responded to this question by suggesting the micro-management of resources was down to the Met Police. She also mentioned the £3.5m granted by central government over three years towards the establishment of a long-awaited central e-crime unit, Hansard reports.

The Government allocates funding to police authorities as a whole. The allocation of resources is a matter for the Metropolitan Commissioner and the Metropolitan Police Authority, who are responsible for assessing local needs.

The Government has also specifically allocated £3.5 million to the Police Central e-crime Unit (PCeU) over three years from 2008-09, with the Metropolitan Police Service contributing £3.9 million over the same three year period. One of the main areas of work for the PCeU will be to support the National Fraud Reporting Centre in tackling electronic fraud.

The Home Secretary's statement underlines something that was already fairly clear - the PCeU will have to make its way on a meagre budget.

The PCeU was established around six months ago to fill the gap in policing cybercrime that opened up after the National Hi-Tech Crime Unit was amalgamated into the Serious and Organised Crime Agency back in 2006.

The unit, which is based in Scotland Yard, provides computer forensics training and is in charge of coordinating efforts to fight electronic crime across multiple police forces. The division also has a role in investigations, leading an investigation into an alleged network of banking Trojan ne'er-do-wells that resulted in the arrest of nine suspects last month.

Detective Superintendent Charlie McMurdie, head of PCeU, appealed for help and volunteers from industry to assist its mission without exceeding its budget during a session at last month's Infosecurity Europe conference.

Earlier to the same conference, former Home Secretary David Blunkett expressed the hope that the PCeU would receive more funding.