48% of Businesses Think They’re Not Big Enough to be Targeted for Fraud
Complacency remains one of the most dangerous behaviors among small business owners. And this makes businesses vulnerable to online fraud and other hacking activities.
Small Business Fraud Statistics
A report from Emailage reveals 48% of small businesses in the US and Canada think they’re not big enough to be a target of online fraud.
Yet statistics debunk this myth. Because small businesses in the US reported losing an average of $28,313.33 to online fraud in the last year.
Still statistics show small businesses believe they need not fear attacks by online fraudsters. And until this mindset changes, these businesses will continue to incur more losses.
Emailage CEO Rei Carvalho addresses this very issue in an emailed press release:
“This research shows a lack of concern among many SMB owners when it comes to fraud prevention. These businesses work with considerably smaller profit margins. Therefore, losing even a fraction of their revenue could have major repercussions for their businesses, impacting long-term growth and business development.”
Emailage carried out the research with a survey of 1,000 people in leadership positions in small businesses. And the participants in the survey included owners, executives or senior management. But it also includes middle management from organizations across the US and Canada.
The survey seeks to determine the attitude of small businesses on fraud prevention.
Not only do 48% of small business owners claim their companies remain too small to be effected.
But 58% of small businesses also said they believe large organizations create a bigger target for fraudsters.
Emailage says this false sense of security costs small businesses tens of thousands of dollars due to fraud.
The speed at which small businesses adopts digital technology continues to grow. And this rate of adoption makes small businesses ever more susceptible to dangers from online fraud.
Small businesses enjoy the benefits of digital technology. But they lack the resources of large organizations to fight off the dangers. Suppose small businesses fail to prevent, contain or resolve fraudulent attacks. Resulting damages can prove disastrous.
These damages go beyond financial loss. Businesses will take a hit to their reputation and brand too. And damage to the reputation and brand may result in great concern for small businesses. Two in five small businesses said they have seen what the damage to a company’s reputation does.
Now 40% of small businesses use email verification to prevent online fraud, the report says
Other solutions include third-party payment processors. Other solutions include IP address trackers, fraudulent account banning and daily accounts reconciliation. Still 10% of small businesses fail to put any systems in place.
Emailage recommends small businesses find a reliable fraud prevention provider. This provider should offer a collaborative approach to your niche requirements, a network of expertise and insight and sophisticated multilayered approach.