World Cup sees brief benefits for small retailers

"Small businesses really needed the injection of optimism and spending that the World Cup is creating for although we had seen a pick-up this year in terms of more cards being swiped, the amount being spent was down and generally businesses were battling with a noticeable upsurge in fraud."

Fraud up with recession

Alexander Forbes Risk Services have reported an upsurge in commercial crime. "Reduced turnover and profits in 2009 saw cutbacks in salaries, no wage increases and the scrapping of bonuses, pushing many employees to seek alternative sources of compensation, often by stealing from their employers," Forbes spokesman Brian Gillespie said.

The increase in claims for commercial crimes, first noticed in July 2009, continued into 2010, resulting in insurers firming their renewal terms on commercial risks. Gillespie said that more risks, including internet fraud, were being written on the broader form commercial crime wording as opposed to the traditional fidelity wording. "This extends to far smaller businesses where insurers are now prepared to consider a block of insurance business within a particular range at comparable rates."

Training to combat fraud

Kent said, "We have helped small businesses combat commercial crime with anti-fraud training workshops for staff, better risk-assessment skills, UV lights to detect fraudulent cards, which tend to be a particular problem with foreign cards and rapid support in the event of technical problems.

"We have also given stores anti-fraud stickers so that shoppers can feel confident that the store has taken measures to prevent fraud on their cards, but it is also a deterrent to criminals who are less likely to try and defraud those with an arsenal of anti-fraud equipment and training."

Bad debt increases

Kent said that while the company was seeing a surge of new business and had been a finalist in the fastest growth category of the recent National Business Awards, "we are concerned at high levels of debt among consumers and small businesses which are mirrored in worrying statistics."

The most recent government statistics show a 2.7% increase for civil summonses issued in respect of money lent and promissory notes and other acknowledgments of debt (contributing 1.3%), which includes credit card debt. "What we can expect to happen is a slowdown in credit card expenditure as more people stop using credit cards or go under debt review and are compelled to use debit cards only," Kent said.

Statistics show that the total number of civil judgments recorded for debt for the three months ended February 2010 increased by 3.8% compared with the three months ended February 2009. Civil judgments in respect of money lent (5.5%); promissory notes and other acknowledgments of debt (3.8%) and professional services (1.4%) were the main drivers behind the 3.8% increase.

"A successful World Cup is important not just for sports fans but the whole economy, we are literally balancing at present on a cusp that could lead to hard economic times if it falls in one direction or could push the economy ahead if the World Cup is a success," he concludes.