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
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, and senior and 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 affected, 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 adopt digital technology continues to grow. And this rate of adoption makes small businesses susceptible to dangers from online fraud.
This comes at a time when small businesses are enjoying the benefits of digital technology. But they lack the resources of large organizations to fight off the dangers. If an SMB is not capable of preventing, containing, or resolving fraudulent attacks, the damage can be disastrous.
These damages go beyond financial loss. Businesses will take a hit to their reputation and brand, which is of great concern for small businesses. In the survey, 2 in 5 small businesses said they have seen what the damage to a company’s reputation does.
For the companies who are using tools to prevent online fraud, an email verification solution was number one for close to 40%.
Other solutions include third-party payment processor, IP address tracker, banning fraudulent accounts, and reconciling accounts daily. Even though there are solutions in place, 10% of SMBs said they didn’t have any system in place to protect themselves.
Emailage recommends SMBs to find a reliable fraud prevention provider offering a collaborative approach to your niche requirements, a network of expertise and insight, and a sophisticated multilayered approach.