A Hertfordshire couple in their 60s were horrified to receive a letter last week from a London firm of lawyers accusing them of dowloading a hardcore gay porn movie. It demanded they pay £503 for "copyright infringement" or face a high court action. The 20-page "pre-settlement letter" from lawyers Davenport Lyons, acting on behalf of German pornogaphers, insisted they pay £503 to their clients for the 115 minute film Army Fuckers which features "Gestapo" officers and "Czech" farmers.

The bewildered couple contacted Guardian Money. "We were offended by the title of the film. We don't do porn - straight or gay - and we can't do downloads. We have to ask our son even to do an iTunes purchase."

But this Hertfordshire couple are not alone. A large number of people have received this letter, provoking a massive outcry on web forums such as slyck.com and torrentfreak which estimate 25,000 of these letters have been sent out. If all the recipients paid up, it would net £12.5m - more than almost any porn film has made.

The lawyers also sent out similar demands for a second German gay porn film with an even more offensive title.

Media expert Michael Coyle at Southampton-based solicitors Lawdit, is fighting on behalf of individuals who have received the letter from Davenport Lyons. "Owners of films, music and computer games obviously have to protect their rights and prevent illegal copying, otherwise everyone would get all sorts of content for free.

"But many of these letters have been sent to people who have no idea what a download is. We've had straight pensioners complain, and a mother who had the shock of having to question her 14-year-old son about gay porn because he was the only apparent user of the internet connection that was registered to her."

Coyle says Davenport Lyons represent DigiProtect, a German company with rights to both pornographic films.

He questions the amount demanded and methods used to identify computers alleged to have downloaded material. He believes the sum demanded is out of all proportion to the alleged injury. "In one case, Davenport Lyons wanted £500 for a £20 game. The alleged file-sharing would have cost only about £50 - the rest is legal costs."

"All they do is find the internet connection, demand the service provider reveal the name and address (not all do) and then send out a letter demanding cash. But the technology is flawed. It is easy to hijack a wireless router especially in a built-up area or a block of flats, so it is never clear who used what," says Coyle.

Coyle offers a £50 service for those who refuse to cave in to the demands as he believes some of the firm's successes are due to consumers paying up because they cannot afford the legal costs of defending themselves.

"They have won court cases including a high-profile £16,000 on a games download. But these have not been defended. My advice is to deny file sharing to any such request," he adds.

We put a number of questions to Davenport Lyons. In a statement it said: "We cannot comment on individual cases. We represent clients who own valuable rights in copyright material and are legally entitled to protect and enforce such rights against any unlawful infringement. The material was not put on a file-sharing site by our clients.

"We write an initial letter to those suspected of illegal file sharing based on technical information received from our clients. Such procedure is required by court rules. We allow ample opportunity for the recipient to respond, and if they have done nothing wrong they have no reason to be concerned."