WHEN the telephone rang in the room Dick Robson uses as an office in a converted Kent barn, he was alone and listening to Classic FM for company.

“Ah,” said a woman with a broad Glaswegian accent, “if anybody else can hear your radio it will count as a performance and you will have to pay us for a licence.”

Robson was a target of the Performing Rights Society for Music (PRS), which chases royalty payments for songwriters and composers.

More than 350,000 people have paid up but there is growing concern among MPs and business leaders about what are seen as aggressive tactics by the society to get people to pay for licences they might not need while at the same time paying its directors high salaries.

Last year it raked in more than £600m in royalties, an overall increase of more than 8% from 2007, to make up for stagnating CD sales and widespread illegal downloading. Its highest-paid director received £425,000 in 2007, three times as much as the head of the DVLA, which licenses 42m drivers.

The PRS makes calls to small businessmen such as Robson, who runs a water purification firm in Linton, Kent. It also sent out 567,000 letters last year to firms in the hope that they would stump up for a licence.

Licences can cost from a few pounds to several thousand, depending on who is listening. Pubs and clubs are obvious targets and can be fined thousands of pounds by the courts if they do not obtain licences.

However, the PRS, which uses private agencies to chase money, is also entitled to target employers in a workplace where music is played and there is an “audience” of staff.

Thousands of letters and phone calls have gone to one-man businesses, dog kennels and catteries that play music to soothe their animals and even police stations – which help to combat music piracy.

Robson, 75, who was targeted last year, said: “There is usually only me here and I like to have nice relaxing music. The woman said she could hear music in the background. I thought, ‘My God, you’ve got good ears.’ She asked how many of us were here listening. I said me and sometimes the dog. Eventually, after I made a fuss, they apologised and said I would not be bothered again.”

John Collins, 57, who runs a software company from a room at his home in Welwyn Garden City, Hertfordshire, received letters saying he needed a licence for the classical CDs he played while working. “If my wife Susan brings me a cup of tea and hears the music then I might be liable,” he said.

“It’s a blunderbuss approach trying to terrify people that they need a licence. It’s a double bubble because the musicians are already getting royalties from the sale of the CD or from plays on the radio. They are just trying to rake in money for a failing industry.”

The charity that runs Dam House, an Elizabethan manor and former hospital at Astley in Lancashire, was told it would need separate licences, one to cover a schoolgirls’ visit once a year to sing modern carols in its tearoom, and another for kitchen staff who play music while preparing food.

Margaret Hatton, a trustee, said: “At first they demanded £450. We eventually got it reduced [to] about a quarter of that, but they are bulldogs. We could not get it through to them that we are a charity run by volunteers.”

Even dogs and cats do not always escape targeting. Follybridge cattery near Peterborough and Stokenchurch dog rescue centre in Buckinghamshire, which play Terry Wogan’s Radio 2 show to their “guests”, were both told they would need a licence in case any workers heard the music. The demands were later withdrawn.

The PRS is facing a test of its powers later this year in a High Court case in which it is claiming £200,000 from Kwik-Fit, the car repair chain, for seven years’ back-duty on licences for radios its fitters bring to work. Last week the PRS halted similar action against Lancashire police, which buys a licence for music at its HQ but not for each of its 35 stations.

There are fears that because big organisations are standing up to it, the PRS may be looking for softer targets.

David Frost, director-general of the British Chambers of Commerce, said: “Businesses, and particularly small firms, feel increasingly hounded by the PRS. Not only are most companies unaware of the need for this costly licence, but they regard the PRS’s tactics as money-grabbing.”

The PRS said it never made “cold calls” and always sent letters first. A quality control system had been introduced to ensure there was no “pressure selling”, it added.

“Over 90% of our members earn less than £5,000 per annum from their work and depend on royalty payments to help them earn while they continue to create,” it said.

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