DESPITE SPENDING BILLIONS of euros on security provisions, small businesses are experiencing a jump in crime and its associated costs.
According to a new survey carried out by the Small Firms’ Association, the incidence, extent, scope and costs associated with crime have increased have all increased since 2009.
In the past two years, 34 per cent of businesses said they were victims of crime. At least 40 per cent of respondents were victims on three or more occasions.
The average cost per incident is €4,518, an increase of almost 55 per cent on 2009 figures. The survey showed the costs incurred per single incident ranged from €100 to €35,000.
SFA director Patricia Callan claims the business community is “under constant attack from planned professional criminality”.
She described today’s crime as “more organised, more ruthless and more persuasive” than ever before. There is an enormous psychological price being paid by business people as a result, she added.
On average, the capital expenditure by respondents on security measures was €6,133 – creating a total investment of €2.02 billion per year for all Irish small businesses.
Retailers are particularly vulnerable with a large part of the cost burden falling on their sector.
The use of intruder alarms is still the most common security system but as criminals become more sophisticated, more complex systems are needed. The use of CCTV has increased to over 53 per cent, while the number of electronic access control systems has risen to almost 37 per cent.
Some businesses are also using alternative services such as mobile and static security patrols, guard dogs and key-holding services.
More than half of the 714 businesses who responded said they tested their security systems on an annual basis.
Forms of crime
The most common form of crime cited by companies was theft of stock. Burglaries also increased from 11 per cent in 2009 to 32 per cent in 2012.
Reports of criminal damage also increased to 30 per cent, while theft of property was reported in 25 per cent of cases.
Credit/cheque card crimes decreased slightly from 9 per cent in 2009 to 8 per cent this year.
Theft of property and cash, internal fraud, armed robberies and extortion reports all increased in the past two years. About 13 per cent of respondents said that these crimes happened whilst travelling on business.
“Small companies who do not have the necessary internal controls in place are open season for fraud and theft. It must be treated as an everyday risk and firms who do not take preventive steps are exposing their business to serious losses,” commented Callan.
Identity Fraud and data theft
Over the past two years, the number of small firms falling victim to scams, identity fraud, phishing and data theft has increased. About 14 per cent of all respondents said they were victims of scams, with 42 per cent of those stating they experienced overseas requests for use of bank details.
The costs of these incidents ranged up to €30,000, with the average price paid of €3,767.
Nearly 6 per cent of firms had experienced online-fraud in regard to their company services/products with the average cost being €7,000.
The SFA is critical of low conviction rates in Ireland relative to other jurisdictions, claiming that small business is under “constant siege”.
According to the group, the number of convictions in 2010 was 41,792 out of more than 284,000 reports of headline cases.
The association also argued that the hidden costs of crime, such as lost production, administrative costs and stress affects businesses and business owners.
Callan has called for the Government and Gardaí to address the group’s concerns and to rigorously apply the laws currently on the statute book.
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