HUNDREDS of East Lancashire businesses have been caught out by a massive bogus data protection con-trick.

Lancashire Trading Standards is heading an inquiry into more than a dozen North West agencies after intercepting £400,000 of £95 cheques sent out by companies which have been misled by their demands.

It is feared that bosses at thousands of small firms across the country have been pushed into sending cheques after receiving letters warning they faced £5,000 fines if they did not register for a Data Protection Licence.

Lancashire Police, the Office of Fair Trading and the official Data Protection Agency have so far intercepted 4,000 cheques destined for one agency, which is using an address at Fleetwood Pier.

Companies that store data about individuals have to register with the government's Data Protection Agency, but the fee is £35, not £95 plus VAT quoted in the letters.

One East Lancashire company to receive a demand for payment is Whalley-based heating engineers Calder Services. Business development manager Craig Nicholls said they had been sent two forms to fill in and a demand for £95.

"We were warned that if we did not register with the Data Protection Agency we would be heavily fined," he said. "I urge companies not to be misled."

Mike Murray, chairman of Business Link East Lancashire, said the Data Protection Act 'con' was a growing problem. "Anyone in business should double check requests for money," he said. "If they are unsure, they should go to an adviser at Business Link."

Jim Potts, chief trading standards officer at Lancashire County Council, said his department had already received more than 50 complaints. He added: "We are aware of 14 of these bogus agencies in the North West.

"A lot of small businesses from all over the UK have been persuaded to send £95 to them and they have been arriving in Lancashire by the sackload."

Sending out such letters is not illegal, but Trading Standards are now pursuing firms on the grounds that advertising regulations may have been breached.

Hyndburn MP Greg Pope said: "It's vital companies and individuals make proper checks before paying any demands.

"All too often they are bogus and its part of a con. Check with the proper authorities."

The Government's Information Commissioner Richard Thomas has taken calls from over 60,000 businesses across the UK who have received notices from these "agencies" over the past 18 months.

"This issue is becoming a daily problem for businesses and is something I take very seriously," he said..

"Our simple message to businesses is to ignore these letters, and not to pay the fee. They should report the letters to their local Trading Standards service."