Combating fraud and business crime

16 Dec 2019

Business crime and fraud are significant problems for UK firms.Businesses face threats ranging from cyber-attacks to theft and property damage. Costs incurred as a result of fraud and business crime run into the billions each year. With this in mind, we outline the steps businesses can take to protect themselves.

Mitigating the costs

A report published earlier this year by the Centre for Counter Fraud Studies (CCFS) at the University of Portsmouth revealed that fraud costs UK firms £130 billion per year. According to the data, losses incurred as a result of fraud have risen by 56.5% since 2009. Reducing fraud losses by 40% would 'free up more than £76 billion each year', the report stated.

Meanwhile, business crime costs small and medium-sized enterprises (SMEs) almost £17 billion each year, according to the Federation of Small Businesses (FSB). The business group also found that traditional crime, such as robbery and criminal damage, affects around 900,000 small businesses every year.

Additionally, cybercrime presents a serious risk to many small firms: businesses reportedly suffer an average of 10,000 cyber-attacks a day, at an annual cost of £4.5 billion. Phishing attempts are the most frequent type of attack, followed by malware, fraudulent payment requests and ransomware.

Fighting business crime

According to the FSB, traditional methods of tacking business crime remain the most effective. The business group has called for the government to increase police numbers in order to help prevent and investigate business crime.

When crime does occur, firms should ensure it is reported to the police. Businesses are also advised to review their physical security measures and business processes to make sure they are robust.

Tackling fraud

The CCFS stated that reducing fraud losses by 40% would help to 'free up more than £76 billion each year'. It found that businesses presently adopt a reactive approach to fraud, and only seek to combat it once it has taken place and losses have already been suffered. The CCFS suggests viewing fraud as a business cost, and urges firms to understand the nature and scale of the cost so that they can help to reduce its extent.

Tightening cyber security measures

Despite the introduction of stringent new data laws implemented as part of the General Data Protection Regulation (GDPR), the government is urging businesses to 'do more' to protect their firms from cyber-attacks and cybercrime. The government encourages businesses to follow the 'ten steps to cyber security' guidance on the National Cyber Security Centre (NCSC) website.

Completely eliminating the threats posed by cybercrime is impossible. However, there are steps firms can take, as outlined on the NCSC website. Businesses should make sure that their anti-virus software is up-to-date and that passwords are updated regularly. Those without security software are advised to install an anti-virus program. Additionally, business owners should also implement clear policies on the usage of business and personal devices.

In order to protect themselves against fraud and business crime, firms should stay up-to-date on crime-related issues and take precautionary measures wherever possible.

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