Business leaders are alerting companies to an adult chatline scam which could leave them with a hefty telephone bill.

The Forum of Private Business said one of its members had received a large telephone bill and the threat of court action if he failed to pay.

But he claims he knew nothing about the phone call or the company threatening legal action called Telephone Billing Services (TBS).

Jane Davies, FPB member contact manager, said: "Businesses can block access to premium rate phone lines, which usually start with an 090 code, quite easily, but with this scam the number began with a standard rate 020 code, which could not be blocked."

Liberal Democrat MP Vince Cable has criticised the fact that Ofcom, the telecoms regulator, appears powerless to prevent this particular scam.

He claims companies such as TBS are taking advantage of a loophole in the current law that prevents 020 numbers from being regulated.