BUSINESSES are being warned about the return of a scam, which claims they need to pay £95 to comply with data protection laws.

Official-looking papers from a company called The Data Collection Enforcement Agency tell firms to send cash in order to register. But the true cost of registering is just £35.

The form, which suggests that it is a criminal offence not to act on the document, is being sent to unsuspecting companies in Worcester.

A spokeswoman for Worcestershire Trading Standards said the scam, which first surfaced about two years ago, was an "ongoing problem".

Since January this year, more than 400 people have rung trading standards to complain about the letters.

"We have phone calls about data protection on a regular basis," she said, adding all information was passed on to the Office of Fair Trading, which was investigating under the provisions of the Control of Misleading Advertisements Regulations.

City MP Mike Foster said he had been contacted by a constituent running a business in the city who was worried about the letter.

"This is a crude attempt to elicit money from the unwary. It looks official, the language is official but it is just a scam," he said.

"Small businesses should just ignore such a letter and if they are in any doubt consult the Information Commissioner for information on data protection."