SMEs under threat from ecommerce fraudsters

Small companies are increasingly under threat from cyber-criminals who exploit loopholes in ecommerce ordering, according to the Institute of Directors (IoD).

The IoD's head of ebusiness policy, Jim Norton, says SMEs are becoming increasingly worried that crooks could easily claim the goods they ordered online were never delivered. This could lead to a flood of fraudulent 'money back' claims which would be difficult to disprove because of the lack of receipts inherent in ecommerce transactions.

"A number of small companies I've spoken to are extremely worried about becoming liable for this kind of problem," he said, adding that the problem is very difficult for smaller ecommerce firms to deal with.

Stephen Alambritis, head of parliamentary affairs at the Federation of Small Businesses (FSB), said the situation is serious: "A lot of businesses say they don't want to deal with ecommerce now because they don't want to end up in court. They think they're too vulnerable to these dangers. This is a very worrying situation that could land small businesses in trouble," he said.

Alambritis said the FSB is currently trying to persuade distributor companies to shoulder some of the responsibility of ensuring delivery of goods is documented.

The FSB is also in talks with the DTI and Patricia Hewitt, the ecommerce minister, to build a framework that will protect small businesses from the problem. Alambritis said this is all part of the government's role to promote ecommerce from SMEs.

"The Internet has an increasingly litigious nature and small companies will require protection before they can go forward into the market," said Alambritis.