Two in Five UK Small Businesses Hit by Fraud, Losing Nearly £4,000 on Average

Fraud is taking a significant toll on small and medium-sized businesses (SMBs) across the UK, with research from Visa revealing that 41% of SMBs have fallen victim to fraudulent activities. On average, these businesses have lost nearly £4,000 in the past year alone. small business fraud Common Fraud Tactics Targeting SMBsVisa’s extensive research underscores the vulnerability of SMBs, which constitute 99.9% of the UK’s business landscape, totalling 5.6 million businesses. The study highlights the most prevalent types of fraud affecting these enterprises:

Billing and Invoice Fraud (26%): Fraudsters manipulate invoices to deceive businesses into making payments for non-existent or altered services.

Phishing Scams (24%): Cybercriminals use deceptive emails and messages to trick employees into revealing sensitive information.

Bank Account Hacks (23%): Unauthorised access to business bank accounts leads to significant financial losses.

Read More: 7 Ways to Protect Your Small Business From FraudThe Broader Impact of Fraud on Business LeadersThe repercussions of fraud extend beyond financial loss. According to Visa’s survey:

28% of SMB decision-makers report diminished trust in third parties following a fraud incident.

22% have experienced personal financial strain as a result.

29% say that fraud has shaken their confidence in decision-making.

20% have faced mental health challenges, and the same percentage are now more hesitant in making business decisions.

Read More: Are You Inspired To Be A Business Leader?Security Concerns Influence Consumer BehaviourFraud doesn’t just affect businesses—it also impacts consumer spending. Security is a top priority for shoppers, with 48% citing transaction security as crucial when making online purchases. This concern follows closely behind the price of goods and services (62%), ease of returns and refunds (29%), and customer reviews (27%).In the six months following a fraud incident, 91.2% of affected consumers reduced their spending, and 6.4% stopped making purchases altogether. On average, consumer spending drops by 46.2% after a fraud event, highlighting the broader economic implications.Read More: Dealing With Rising Cyber Security Threats: What Companies Can Do To Improve Digital SafetyVisa’s Response: Empowering SMBs with a New Digital ToolkitRecognising the urgent need to support SMBs, Visa is launching a new digital toolkit designed to educate and empower small businesses against fraud. This comprehensive resource offers:

Insights into various fraud schemes targeting SMBs.

Practical tips to enhance business and customer security.

Guidance on implementing robust anti-fraud measures.

Mandy Lamb, Managing Director of Visa UK & Ireland, stated, “Small businesses should not be held back by fraud. We invest heavily in technology to safeguard these businesses, levelling the playing field between small and large enterprises online. This toolkit is part of our commitment to help SMBs manage their operations securely and confidently in a digital world.”A Proven Track Record in Fraud PreventionVisa has long been a leader in fraud prevention, investing £8 billion globally to reduce fraud and enhance network security over the past five years. In the previous year alone, Visa prevented an estimated £30 billion in global fraud, maintaining some of the lowest fraud rates among payment methods. The introduction of innovative technologies, including Visa’s AI-driven RTP Protect, further strengthens defences against account-to-account payment fraud.Get Started with Visa’s Fraud ToolkitVisa’s new fraud toolkit is now available for UK SMBs looking to bolster their defences against fraud. Explore the toolkit here and take proactive steps to protect your business and customers.For more insights and updates on fraud prevention and digital security, follow our blog and stay informed on the latest trends impacting small businesses.