SOLE traders and small businesses are being targeted by corporate identity thieves.

The warning to companies in York and North and East Yorkshire came today from Danny Harrison, head of identity theft products at CPP, the financial protection firm.

York-based CPP, which offers insurance and other protection against hazards including lost credit cards and identity fraud, revealed that while 71 per cent of UK businesses are concerned about company identity theft, only 17 per cent have a specific strategy for dealing with it.

A survey carried out by CPP with the Federation of Small Businesses suggests British businesses may already be losing £50 million per year through this kind of scam.

And it is estimated that by 2030 the cost of such fraud will rocket by 1,300 per cent.

Mr Harrison said: "Our region is likely to be affected in line with this national trend. We have to be prepared for it."

He explained how the fraud worked.

"Say that you are a sole trader operating from home, perhaps buying and distributing computers.

"You are contacted by the fraudster in the guise of a customer, who ferrets out all he can about you and your venture.

"He or she establishes the registered name and address of your business, VAT registration number, details about your suppliers or customers and who you bank with.

"Then he contacts your suppliers and notifies them of your change of address - a little warehouse he has set up, perhaps by signing a lease in your name - and at the same time orders a huge volume of computers from them.

"On delivery he loads them up and makes his escape."

He said CPP, which already had a personal ID fraud insurance, had extended it to small businesses and was preparing to launch a new product for large corporates later this year.

He said: "The problem with corporate identity theft is the same as personal identity theft - the onus of proof is on the scammed rather than the scammer.

"It is up to Mr Sole Trader to prove that he or she did not order those computers, that he was not the lessee of the warehouse, etc.

"We have the experts that can hasten that process of name-clearing and still offer it at the normal premium of £79.99, even if the product is bought after the scam rather than before, although naturally there would be no settlement on the loss."