TRADITIONAL crime, including:- organised shoplifting, drained more than £1,000 from over 50% of small business victims across England and Wales in the last two years, with 1 in 10 losing more than £10,000 according to new research by the Federation of Small Businesses (FSB).

FSB’s Cracking the Case report, published today, shows how small businesses are facing a double whammy of virtual and physical crimes, with an overwhelming 81%; or 4.1 million; of them in the two nations affected by at least 1 crime between January 2021 and January 2023.

That’s a jump from 49% in the same period between:- 2017 and 2019.

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

35% have been impacted by at least one traditional crime in the last 2 years. These crimes are related to vandalism and/or damage to premises, and 34% anti-social behavior, followed by 33% burglary or robbery, and theft by 29% party.

As a result, 56% of the victims lost more than £1,000, while 33% faced losses of £1,000 or less. 11% lost more than £10,000.

With the local Police and Crime Commissioner elections on the horizon, FSB is urging those standing as a candidate in the Cheshire and Liverpool City Region to recognize this alarming issue and ensure they place business crime front and center of their manifestos.

The report finds close to 37% of small businesses have encountered fraud, costing 44% of the victims up to £1,000. Some 39% lost more than £1,000 and 8% say it cost more than £10,000.

31% of Invoice fraud is identified as the most common type of fraud. 29% of Card and/or cheque fraud comes in 2nd and 26% goes to unauthorized payments from bank cards and/or accounts.

A majority (72%) of small businesses have encountered cybercriminals with 92% phishing, dominating the scene. 1 in 10 have faced malware attacks, while a similar 9% proportion have said they had their social media accounts hacked.

As with the fraud, 44% of those falling victim to cybercrime lost up to £1,000. A 3rd lost more than £1,000 and 6% say it cost more than £10,000.

The surge in the number of crimes against small businesses is despite 65% taking at least measures to protect themselves against traditional crimes, such as installing or updating security, initiating a training programme, and improving insurance cover. An overwhelming majority (92%) gear up against cybercriminals and fraudsters, ranging from installing anti-virus software to updating software on IT systems regularly.

66% of small businesses say they have reported their most impactful crime. Out of that, 30% had reported it to the Police, 20% to their bank, and 18% had reported it to their IT provider or service. 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 and/or Action Fraud, and no plans to make an insurance claim.

Among a 3rd of small business victims that have reported the crime to the Police, 59% say Officers did not attend the scene. 48% believe the Police did not investigate after the initial response. Merely 3% say the Police investigated, identified, and arrested the perpetrators.

Amid increased reports of organized shoplifting, some businesses say they feel it is wrongly seen as an:- "acceptable business cost."

In light of the findings, FSB has put forward a list of recommendations for traditional crime, including...

Police and Crime Commissioners and candidates should:-

Include business crime as a priority in their Police and Crime Plans and in manifestos for all those standing for election in May 2024 demonstrating commitments to business crime from the beginning to the end of their term.

Home Office should:-

Introduce a separate offence for violence against retail workers.

Clarify that there is no £200 threshold for investigating organised shoplifting offences. There is currently an impression that shoplifters will not be arrested if they steal under £200 worth of goods.

For cybercrime and fraud...

UK Government and National Cyber Security Centre should:-

Review the pricing of Cyber Essentials certification as well as costs associated with annual renewal for the smallest businesses and explore whether lower tier pricing or a special reduced rate could be introduced.

Home Office should:-

Include the impact of fraud on small businesses in the next fraud strategy and consider a specific targeted approach with clear objectives.

On policing, FSB is calling on the Home Office to:-

Introduce a mandatory recording process for business crime and add a ‘business crime’ section to the crime outcomes in England and Wales statistics so progress can be tracked, and targets set.

Sim to increase the average number of Police Officers in England and Wales up to 335 per 100,000 population.

FSB Merseyside and Cheshire spokesperson Phil McCabe said:- "Small businesses are a huge and increasing target for criminals; the new Home Secretary and the Police must act to provide the safety and security on which day-to-day economic life depends. We’ve been hearing countless reports of organized shoplifting over the past year, and our study further shows how serious and unprecedented the problem is. This is certainly not what we need at a time when we look to grow our economy. Witnessing our small high street shops and independent businesses losing their hard-earned money because these crimes are overlooked by authorities is disheartening, not to mention the mental toll on small business owners and their staff. What’s also alarming is the explosive rise in cybercrime and fraud from the persistence of phishing emails to sophisticated invoice fraud. We need to see not only firmer and swifter action from the Police and Government, but also politicians standing in the General Election to make business crime a priority as they seek the votes of the UK’s 5.5 million small business owners. Sadly, so many small firms across Cheshire Warrington, and Liverpool City Region will have found themselves the target of business crime, whether it be as a victim of fraud or cybercrime, or offenses like theft, or even anti-social behavior. 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 Police and Crime Commissioner election is a good opportunity for candidates to show they have the backs of small firms by pledging to put business crime central to their manifestos. To create flourishing high streets and town centers, we need small business owners to feel safe and listened to."