Dave,
Very sorry to hear of your problem. I think that once again Trevor has the answer with the newspaper announcement (which will need to be repeated).
With carefull wording you can, without actually saying so, sugest that they are deliberately cashing in on your very good, well estabised reputation. You could even add an apology to those customers of yours who have been mislead by the duplication of YOUR trading name.
People do not like con-men and though you do not want to call them names, if that impression is left in the minds of prospective new customers it could have a positive effect on your business and cover the additional cost of you advertising.
When placing the advertising, you may be able to get the editorial department interested in the story. Even a couple of (free) colomn inches featuring an interview and posibly a comment from the local Office of Fair Trading would greatly increase the impact. It would help if the advertising rep was given the impression that editorial coverage would encourage more advertising space bought by you

Best of luck,
John.