Companies using unlicensed software are at risk of incurring jail sentences and a loss of reputation, the Federation Against Software Theft (FAST) has warned.

Clair Darke, FAST's group marketing manager, said that unlicensed software may be of the same apparent quality as licensed software, but would not include the same IT support and maintenance.

The risks of buying counterfeit software include "jail sentences, court cases and a loss of reputation", Ms Darke said, adding that it poses security risks as well. If people download content from the internet, they might not know what they are downloading, meaning they may need network support.

FAST conducted a survey finding that more than one in five company directors do not have a written software management policy, and that almost half of respondents would have difficulty proving their software is illegal.

The lack of a software management policy also suggests that businesses are ill-prepared in terms of business continuity.

A recent Connect survey found that the two major concerns about outsourcing services like IT support were 'loss of control' (56 per cent) and 'budget over-runs' (43 per cent)