Blue chip firms find bugging is now big business

Private investigators say some organisations are paying up to 10,000 to have their premises checked to keep sensitive information under wraps.

Stephen Grant, a partner with the Edinburgh-based investigators Grant & McMurtrie, deals with about 150 companies each year which have concerns about lapses in security.

He said: "People are becoming more aware of the technology available. Bugs are very cheap and can be bought for less than 100. "We provide counter-surveillance and de-bugging equipment. We check merchant banks and the boardrooms of blue chip companies."

Privacy International, a watchdog on government and corporate surveillance, estimates that more than 200,000 bugging devices and covert cameras are sold every year.

Products include everything from "bugs" concealed in pens, calculators and credit cards, to an electronic olive on a cocktail stick.

Mr Grant said that underhand tactics are a regular feature of the corporate world. In extreme cases, bosses hire "moles" to infiltrate other companies to gain sensitive information.

He cites a recruitment firm in Edinburgh which was caught sifting through the bins of a rival firm to identify clients.

"It’s not just the bigger firms that are affected. We had a small company which specialised in burglar alarms. The owner was putting in quotations, but the same competitor was getting the work every time. We discovered his phone was bugged and the competitor was undercutting him."

Sophisticated listening devices can pick up conversations within a range of 100 metres. Smaller than a box of matches, they can be stuck to the underside of a desk or chair.

A spokesman for the Confederation of British Industry Scotland urged managers to remain vigilant.

"Advances in technology mean that companies will need to be alerted to the use of this equipment. Unfortunately, there are people who will try to gain an unfair advantage over other firms. There are specialists in the field who try to ensure that these devices can be found."

Professor Stuart Macdonald of Sheffield University’s Business School, a leading researcher on espionage, said the realm of seeking or safeguarding business secrets is a growth market. Even universities are being encouraged to patent products before they publish research, so that rival academics do not steal their ideas.

"This is not just large companies," said the professor. "You can include universities, the public sector and the NHS in this. Knowledge is a primary resource, and they have to show that they are keeping information in-house.

"The universities are putting systems in place to make sure that it doesn’t leak out."

Corporate crime costs companies a fortune, as revealed in the last Business Crime Survey in 1999, which identified losses of more than 600 million for Scotland alone.

Inspector Brian Connel, an officer with Strathclyde Police and assistant director of the Scottish Business Crime Centre, said many companies felt it was not worth their while to launch a costly legal battle in the courts.

He said: "There is an under-reporting of business crime.

"The law is not always specific enough to prove that there has been an infringement."

He added: "A company may not report it in the first instance because of the embarrassment which could lose them business."