Over £1 billion lost by businesses to online crime in the last year

cybercrime

On average, each police force in the UK recorded £19,626,323 in losses by businesses in their area. However, the true picture could be even higher, as these figures do not take into account the amount potentially lost by those businesses who choose not to report online crime to the police.

The online crimes businesses must watch out for

Delving into the figures, Mandate Fraud is becoming an increasingly worrying issue for businesses. This occurs when a fraudster gets victims to change a direct debit or standing order by pretending to be an organisation a victim makes regular payments to, for example a business supplier or subscription service. It’s an extremely targeted approach, and in the last year, has seen a significant 66 per cent increase, with 2323 reported cases, compared to 1403 in 2014 – 2015.

Other types of fraud which have spiralled are CEO Fraud – where an employee is tricked into making a payment by means of an email purporting to be from a senior manager – and extortion, where files on a computer or entire network are rendered inaccessible by ransomware until a release fee is paid.

Corporate employee fraud – where employees or ex-employees obtain property or compensation through fraud, or misuse corporate cards and expenses – is also on the rise, with 1440 cases recorded in 2015 – 2016. Listed in the top ten most reported crimes by businesses in the last 12 months, this demonstrates how fraud is not just an external threat, but can also affect a business from the inside. It is therefore vital for all businesses to provide their staff with the right tools and training to be able to identify signs of fraud or suspicious activity, before it’s too late, as well as having guidelines in place on whistleblowing.

Hacking is perhaps one of the main issues facing businesses. A fraudster can hack into a business’s server, an employee’s personal computer, or access email/ social media accounts to obtain private information. In its various forms, hacking is one of the most widely reported types of fraud in the past 12 months, with 1314 reported cases.

Retail and investment industries also targeted

Other types of fraud committed against specific industry sectors such as retail and insurance also accounted for a substantial proportion of crimes reported by businesses, owing mainly to the typical transaction values involved.

Retail fraud – defined as fraud committed against retailers through refund fraud, label fraud or when goods are ordered with no intention of paying – has risen by 71 per cent from 3559 cases reported in 2014 – 2015, to 8163 cases in the last year. This topped the list as the most reported type of online crime in the past 12 months, accounting for almost a quarter of the total recorded crimes. A substantial increase in retail fraud reports came between November 2015 to January 2016, possibly connected to the increased spending in retail over the Christmas and winter sale period.

In addition, Insurance Related Fraud showed a marked increase of 68 per cent, from 587 in 2014 – 2015, to 986 cases in the last year.

The areas most affected

In terms of the areas worst affected, Metropolitan and Essex police forces received the largest volume of reports, with 5,742 and 2,505 cases of online crime. This is followed by Thames Valley, Kent and West Midlands. Furthermore, the Metropolitan Police area had the highest reported loss of £240 million, followed by Essex (£196 million) and Leicestershire (£188 million). 

Tony Neate, CEO of Get Safe Online commented: “These latest figures show the enormous, and quite frankly daunting impact online crime can have on a business, its reputation, its employee and even its continued operation. It also highlights the abundance of ways a business can be targeted, both externally, and from within. To tackle this issue head on, businesses need to review their own skills and knowledge, determine if they need outside help, and then create measures to prevent, detect and respond to potential security threats. It’s all about education, and staff must be aware of this plan and trained where necessary.

“With new data regulations in place, we’ll see more and more businesses start to report online crime and realise that the right staff training can go a long way to helping prevent this growing problem. We recommend all small businesses visit the Business section of the Get Safe Online website: https://www.getsafeonline.org/business/ and take full advantage of the Government’s free online fraud awareness resources: https://www.gov.uk/government/collections/cyber-security-training-for-business. ”