A REST home owner in Kidderminster has warned other small businesses to ignore a threatening cash demand from a firm claiming to regulate health and safety laws.

Tom Ramnial, who owns the 24-bed Gables rest home for the elderly in Broomfield Road, said he was warned he faced prison or a large fine if he failed to pay up.

When he contacted the Health and Safety Executive, however, he was told not to pay as the information was bogus.

He received two letters in quick succession from the Health and Safety Enforcement Division, asking him for £199 so he could meet new registration laws on health and safety.

"I have since spoken to a relative who runs a small business and has paid up and I'm sure there must be others in this area who have done so."

The letter says all companies must now go on a new register to demonstrate they comply with health and safety regulations. The company demands between £199 and £249 to be included.

It goes on to warn that owners of companies which fail to comply risk going to prison for up to two years and being heavily fined.

The Health and Safety Executive has confirmed that HSRED is one of three companies currently under investigation nationally.

The three, all based in north west England, have written to firms all over the country asking for between £125 and £249 to ensure they comply with health and safety law, said a spokesman.

The two other companies are the Health and Safety Enforcement Agency (HSEA) and the Health and Safety Compliance Agency (HSCA).

Anyone receiving literature from any of these companies can ignore it as there is no legal need for anyone to buy literature or services from these companies, said Justin McCracken, HSE's deputy director general.

"None of these companies is connected to HSE. Organisations should be very wary of any approach from these firms.

"These companies are asking for significant sums of money, claiming they will send out information, much of which HSE provides free of charge," added Mr McCracken.

"HSE's legitimate Health and Safety Starter Pack is available to any business for £30. Not only does the pack cost a lot less but it is also the real thing."

A Worcestershire Trading Standards spokesman confirmed complaints had been received which had been passed on to colleagues investigating the companies involved.