Around three in ten companies have been a victim of fraud, typically by a customer or client (13 per cent) or through ‘card not present’ fraud (10 per cent), according to a study by the Federation of Small Businesses (FSB).

The most common threat to businesses is virus infections, which 20 per cent of respondents said they have fallen victim to, with 8 per cent having been a victim of hacking and 5 per cent suffering security breaches.

The FSB is concerned that the cost to the wider economy could be even greater as small firms refuse to trade online believing the security framework does not give them adequate protection.

Almost 20 per cent of businesses have not taken any steps to protect themselves from a cyber crime, according to the research.

However, 36 per cent of respondents say they regularly install security patches to protect themselves from fraud and almost six in ten regularly update their virus scanning software to minimise their exposure to online crime.

Mike Cherry, FSB national policy chairman says, ‘Cyber crime poses a real and growing threat for small firms and it isn’t something that should be ignored. Many businesses will be taking steps to protect themselves but the cost of crime can act as a barrier to growth.’

James Brokenshire, MP parliamentary under secretary for security, Home Office says, ‘Cyber security is a crucial part of the government’s national cyber security strategy and we need to make sure that all businesses, large and small are engaged in implementing appropriate prevention measures in their business.’