BOGUS data collection agencies are targeting businesses in the North-East with demands for cash.

The agencies have written to companies warning them they are breaking the law by not being registered under the Data Protection Act 1998.

The official-looking letters include a demand for a fee of £95 to "avoid further action".

The Office of Fair Trading said it had received hundreds of complaints about the letters and was taking action against some companies.

"It is not unlawful in itself to provide a registration or notification service to data controllers or users," said a spokeswoman.

"In the cases that we have taken action against, the OFT considered that the advertisements were misleading, because they gave the impression that they came from official bodies and that the businesses receiving them were under a legal obligation to register with the sender immediately."

Cleveland Flying School, which is based at Teesside International Airport near Darlington, received a letter from the Crown Data Collection Enforcement Agency in Cheshire.

Flying instructor Dale Reynolds said: "The letter purported to be from an official agency, but the syntax, grammar and punctuation were not up to scratch.

"We weren't taken in, but you can imagine there will be businesses that are."

The Government's Information Commissioner has released a list of agencies known to have sent misleading letters.

Companies which receive the letters should contact their local Trading Standards office.