UK SMBs lose GBP £11,000 on average to online fraud in 2024

New research has revealed that small and medium-sized businesses (SMBs) in the UK lost an average of nearly GBP £11,000 due to online fraud in 2024.

The study, commissioned by financial service provider Mollie, surveyed 500 decision-makers from UK SMBs and found that 54% of these businesses fell victim to online fraud within the past year. This has raised significant concerns among business leaders, with 90% expressing worries about their business's survival due to such attacks.

Phishing scams emerged as a predominant issue, with 58% of businesses having encountered such scams where fraudsters impersonated trustworthy companies to steal sensitive information through email.

Additionally, refund fraud was reported by 42% of respondents. This type of fraud involves customers manipulating refund policies to claim money for products or services they were not entitled to receive.

Another prevalent issue was account takeovers, affecting 30% of businesses. In these instances, unauthorised individuals attempted to gain control of the businesses' online accounts.

A quarter of the surveyed SMBs (26%) experienced chargebacks on legitimate transactions, while 23% faced carding attacks, where stolen credit cards were tested, leading to a surge in failed transactions.

Besides the financial implications, fraud has significantly affected productivity. Businesses reportedly spent an average of 15 days, equivalent to 120 hours annually, in efforts to manage and mitigate fraud-related concerns. This, in turn, has shifted resources away from essential business operations, adding strain to already limited budgets.

Richard Wivell, Marketing Manager at the wholesale giftware supplier Nemesis Now, shared their experience, stating, "Experiencing gateway attacks was a costly and stressful ordeal for our business. We dealt with fake orders, refunded fraudulent payments, and worked overtime with developers to manage thousands of malicious requests. Unfortunately, the lack of urgency from our previous provider forced us to take matters into our own hands working with our trusted web development agency to identify vulnerabilities and blocking attacks."

Dave Smallwood, UK Managing Director of Mollie, highlighted the importance of these findings, "As the backbone of the UK economy, it's crucial that UK SMBs—especially e-commerce ones—are equipped with practical solutions to manage their money and fight fraud effectively. Many small businesses lack the resources to cover a single fraudulent incident, and without support and action, we risk stifling business innovation and growth."

He continued, "Fighting fraudulent activity is taking resources away from day-to-day business operations, and we need this to change. We need to provide businesses large and small with access to the support needed to safeguard against increasingly sophisticated threats so they can focus on the job at hand."