Don't be colour-blinded by red tape

'Tapeworms' that sell expensive, official-looking - but fake - registration services, cost UK business thousands of pounds. Ross Davies helps you guard against them

Few people have a good word to say for red tape other than the politicians, bureaucrats and lawyers who are paid to manufacture and enforce it. But there is one other creature that thinks the more paperwork that's dumped on businesses, the better.

This is the "tapeworm", the kind of trickster who defrauds unsuspecting businesses by exploiting the confusion and stress engendered by endlessly proliferating red tape. Posing as enforcement agencies like the Health and Safety Executive or the Information Commissioner's Office (ICO) (data protection) the tapeworm sells high-priced, official-looking "information packs" when the real thing is cheaper or free.

The tapeworm also sends threatening letters demanding registration fees, again on official-looking notepaper. "Failure to register is a criminal offence," one such demand states, adding "on conviction, an offender is liable to a maximum fine not exceeding level five on the criminal justice scale." Another bogus demand claims, "It is imperative that your notification reaches the Information Commissioner (in accordance with the Data Protection Act 1998) within the next seven days. Failure to register as such is liable to a maximum fine of £5,000 in the Magistrates Court."

Sums of up to £135 are demanded by return of post to register under the Data Protection Act (1988). But not all companies need to register, even with the real Information Commissioner. Exemptions are possible for companies that only process personal data for staff administration, accounts, advertising, marketing and public relations. If you do need to register, the fee is not £135, but £35, with no VAT, and the money should be paid direct to The Information Commissioner at Wycliffe House, Water Lane, Wilmslow, Cheshire SK9 5AF. When in doubt, log on to the ICO website at or telephone the Notification Helpline, 01625 545700.

Richard Thomas, the Information Commissioner, says he has received more than 60,000 calls in 18 months from businesses and professionals who have received notices from phoney "agencies". Thomas says: "Over the past two years these scams have cost British organisations many thousands of pounds." Lately, complaints have been coming in from medical practices, so even doctors are now afflicted by these financial parasites.

Justin McCracken, Deputy Director-General of the Health and Safety Executive (HSE), says HSE has received nearly 2,500 complaints in three months about firms purporting to regulate health and safety legislation. Three of these firms, all based in the North-west, demand between £125 and £249 to "ensure" compliance with health and safety law.

A Liverpool firm calling itself the "Health and Safety Enforcement Agency" demands £125 for a health and safety compliance pack. Yet HSE's legitimate Health and Safety Starter Pack is available to any business for £30, and other HSE information is free, and all of it is the real thing.

The Manchester-based Health and Safety Compliance Agency says a health and safety compliance register is becoming law, and that every business should apply for "registration", at a fee of £129.25. A third company, the "Health and Safety Registration Enforcement Division", which gives a Rochdale address, demands you pay up to £249 for health and safety "registration".

Justin McCracken, of the real Health and Safety Executive, says: "None of these companies is connected to HSE, and people should be very wary of any approach from any company 'offering' similar services. HSE never writes indiscriminately to firms seeking advance payment for services yet to be provided."

If you receive notices from such companies, you can ignore them. There is no legal obligation to buy their literature or other purported services. Better still, report the sender to HSE's Infoline on 08701 545500 or to your local HSE office.

The Institute of Directors and British Chambers of Commerce (BCC) are among the trade and professional organisations that are also warning about tapeworms after complaints from members. BCC is busy with fraudsters of another kind. Members are being offered "bargain" advertising space in what is wrongly claimed to be a BCC journal, while still more crooks solicit cash for "investments", claiming BCC approval.

The ICO website lists no fewer than 26 "tapeworms", nearly all with the words "Data Protection" in the company name. But these are by no means all of them - just the ones being investigated by the Office of Fair Trading.

The trouble is, there is so much red tape, and it gets so tangled, that this variety of tapeworm is even more difficult to dislodge than the intestinal variety. Neither the Information Commissioner nor the Health and Safety Executive has powers to proceed against fraudsters that that take the agencies' name in vain.

Complaints made to either body or to trade and professional associations are turned over to the police, local trading standards officers and the Office of Fair Trading. But legal proceedings, usually under Control of Misleading Advertisements Regulations, take time. It's hard to come down quick enough or hard enough to stop offenders reopening for business under another and similar, but equally-bogus, name or names.

When push comes to shove, therefore, you're on your own with these parasites.