Organised shoplifting among crime rise hitting small businesses hard

And one in ten lost in excess of £10,00, according to new research by the Federation of Small Businesses (FSB).

FSB’s Cracking the Case report shows how small businesses are facing a double whammy of virtual and physical crimes, with an overwhelming 81 per cent – or 4.1 million – of them in England and Wales affected by at least one crime between January 2021 and January 2023.

That’s a jump from 49 per cent in the same period between 2017 and 2019.

The flagship report also revealed a growing number of reports of organised shoplifting and threatening behaviour towards shop owners and their staff.

More than a third (35 per cent) have been impacted by at least one traditional crime in the last two years. These crimes are related to vandalism/damage to premises and anti-social behaviour (34 per cent), followed by burglary or robbery (30 per cent) and theft by a third/external party (29 per cent).

As a result, over half (56 per cent) of the victims lost more than £1,000, while a third (33 per cent) faced losses of £1,000 or less. One in ten (11 per cent) lost more than £10,000.

The report finds close to two-fifths of small businesses have encountered fraud, costing 44 per cent of the victims up to £1,000. Some 39 per cent lost more than £1,000 and eight per cent say it cost more than £10,000.

Invoice fraud – 31 per cent – is identified as the most common type of fraud. Card/cheque fraud (29 per cent) comes in second and a quarter (26 per cent) goes to unauthorised payments from bank cards/accounts.

A majority (72 per cent) of small businesses have encountered cybercriminals, with phishing (92 per cent) dominating the scene.

One in ten have faced malware attacks, while a similar proportion (nine per cent had their social media accounts hacked.

As with the fraud, 44 per cent of those falling victim to cybercrime lost up to £1,000. A third lost more than £1,000 and six per cent say it cost more than £10,000.

The surge in the number of crimes against small businesses is despite six in ten (65 per cent) taking at least one measure to protect themselves against traditional crimes, such as installing or updating security, initiating a training programme, and improved insurance cover.

An overwhelming majority (92 per cent) gear up against cybercriminals and fraudsters, ranging from installing anti-virus software to updating software on IT systems regularly.

More than six in ten (66 per cent) small businesses say they have reported their most impactful crime to the police (30 per cent), their bank (20 per cent) and their IT provider/service (18 per cent).

The rest chose not to report for a wide range of reasons, such as thinking the crime wasn’t serious enough to report, a lack of confidence in the police/Action Fraud, and no plans to make an insurance claim.

Sue Tonks, FSB regional chair for the West Midlands, said: “Sadly, so many small firms across Staffordshire and the West Midlands will have found themselves the target of business crime, whether it be as a victim of fraud or cybercrime, or offences like theft, or even anti-social behaviour.

“Crime against small businesses not only has a detrimental impact on those who run and work for them, but also hurts the wider economy. Next year’s PCC election is a good opportunity for candidates to show they have the backs of small firms in Staffordshire and the West Midlands, by pledging to put business crime central to their manifestos.

"In order to create flourishing high streets and town centres, we need small business owners to feel safe and listened to.”