Most nonviolent crime against small business in the future will be computer-related fraud that could sap millions of dollars, said a government report released last week.
The report on how computer crime hurts small business -- prepared by the Small Business Computer Security Education and Advisory Council of the Small Business Administration -- was released during a House Small Business subcommittee hearing on the problem.
The 10-page report concluded, "The use of computers in small business will continue to grow at a dramatic rate," and computer crime against small business "will also increase."
It called for "a massive awareness and educational process" to help fight computer criminals.
"In the future, most all nonviolent crime against small business will be computer-related or (will) use the computer as a masking tool," the report said.
"This is because the use of computers for business applications in small business will be so pervasive that it will be impossible to commit a nonviolent crime except in the presence of computers," the report said.
Subcommittee Chairman Rep. Ron Wyden (D-Ore.) said a national accounting firm has estimated that American business loses between $3 billion and $5 billion a year to computer fraud. Also, he said, the FBI estimated the average dollar amount of reported computer fraud cases at $600,000 -- far more than the $23,000 average in traditional fraud.
The losses can be particularly devastating to small businesses, whose use of computers grew an estimated 30 percent in the past two years and which have limited capacity to absorb large losses.
"What's particularly frightening is that experts believe many companies simply don't report computer fraud," Wyden said, adding that a computer industry publication estimated that perhaps only 15 percent of frauds are reported "for fear that the reporting company's reputation would be devastated."
The advisory council that wrote the report also has published a "Small Business Guide to Computer Security" that will be available to the public within the month.
The 30-page guide discusses the dangers of computer fraud, steps that can be taken to prevent it as well as legal and insurance ramification.