Firms duped over data registering

Many small businesses have been targeted

By David Schaffer BBC News Online, Manchester

At least 4,000 UK firms have been duped into registering with bogus data protection agencies in the North West, an investigation has revealed.

An inquiry is under way in Lancashire into how companies have sent a £95 fee to the agencies after being threatened with £5,000 fines.

Trading standards officers have intercepted nearly £400,000 worth of cheques, many of which have been in reply to a firm based at a false address in the county.

Lancashire Police, the Office of Fair Trading (OFT) and the official Data Protection Agency are involved in the inquiry in to at least 14 fake firms.

Jim Potts, of Lancashire Trading Standards, said the letters look professional and use panic tactics, such as being labelled "final notice".

A lot of small businesses from all over the UK have been persuaded to send out £95

Jim Potts, Lancashire Trading Standards

While companies that store data about individuals do legally have to register with the official Data Protection Agency, the fee is only £35.

Mr Potts told BBC News Online: "We are fully aware of 14 of these [bogus] agencies in the North West.

"And a lot of small businesses from all over the UK have been persuaded to send out £95 to them.

"We have got more than 4,000 replies, so that's almost £400,000 straight away [that these fake firms could have made]."

'No sense'

One Leeds woman who is setting up a business said she panicked initially when she got a letter, from the fake Lancashire address, in Fleetwood.

The 36-year-old, who did not want to be named, said: "The letter said that under the Data Protection Act of 1989 it is an offence for any business not to register.

"But then I thought it didn't make sense, I've been in full time employment for the last two years, and my business is not up and running yet."

Misleading advertising

After contacting the official Data Protection Agency, she ignored the letter and sent no money.

Mr Potts said the act of sending out the letters is not illegal, but misleading advertising legislation could be used to prosecute.

An OFT spokesman said investigations are ongoing into several UK firms, one of which includes the Fleetwood company.

As yet none of the people behind the operations have been tracked down.