The Federation of Small Businesses (FSB) has warned that problems such as hacking, computer viruses and data security breaches were a “barrier to growth” that could no longer be overlooked.
A report from the FSB found that cyber crime is costing its 200,000 members a total of £785m a year – or £3,750 for every small business.
Over the last year, 41 per cent of the group’s members have been a target of cyber crime, often through frauds carried out by a customer or client, or so-called “card not present” situations (when purchases are made online, by mail order or over the phone).
Virus infections hit 20 per cent of respondents; 8 per cent said they had fallen victim to hacking and 5 per cent suffered security breaches.
The lobby group is anxious that the cost to the wider economy could be much greater, as small businesses refuse to trade online because they believe the security framework does not give them sufficient protection.
One in five FSB members said they had taken no steps to minimise their exposure to online crime.
FSB chairman, Mike Cherry said: “Cyber crime poses a growing threat for small firms and it isn’t something that should be ignored. 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.
“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.”
The FSB has a number of recommendations to help businesses protect themselves. These include a combination of standard security protection steps (e.g. putting up a firewall and using anti-spam and antivirus software); carrying out regular security updates on all devices and software; and ensuring there is a resilient IT system and email password policy.
The Government has encouraged small businesses to spend more on security to address the increase in cyber crime and meet the terms of a tough EU directive.
The Data Protection Bill will force businesses to tell regulators every time they fall victim to a data breach. The Government is offering moderate help to small and medium-sized businesses by employing security consultants to tighten defences.
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