One in ten of the unauthorised investment intermediaries cold-calling in the Republic are urging people to invest in foreign exchange dealings, according to estimates by the Central Bank.

The callers are claiming they can get extremely high returns for investors and in some cases state that investors' funds are guaranteed. In reality investing in foreign exchange dealings is a very high-risk form of investment, not much different from gambling.

Prospective investors are given data showing how much an investment made on a certain date, in a particular currency, reaped for other investors. They are also often bombarded with technical jargon to do with investing in currencies which, when analysed by the Central Bank, often turns out to be nonsense.

Since August 1998, when new powers contained in the Investment Intermediaries Act 1995 came into effect, the bank has placed 23 warning notices in newspapers concerning 50 different unauthorised firms.

The unauthorised firms operate from a wide variety of jurisdictions including Spain, the USA, Switzerland, the Czech Republic, Hong Kong and even Uruguay. The bank has to satisfy itself that the firm is conducting business here before it publishes a warning.

The bank has noticed that a warning about a firm which has been brought to its attention will often lead to it being contacted by members of the public about other unauthorised firms. The situation will then go quiet for a period before another complaint is made and substantiated, leading to a new warning which, in turn, will lead to further unauthorised activity being brought to its attention.

The bank believes that the sustained level of attention which unauthorised intermediaries are giving to the Republic supports the view that they are getting some return on their effort.

However recent calls being received by the bank are generally from people who are considering making an investment rather than people who have made an investment. The number of people losing money may be falling.

In the past one investor has lost a six figure sum though the amounts involved are usually below £20,000 (€25,390).

For the bulk of people contacted what is being suggested is investments in shares. Overall the bank advises all people contacted at home to be suspicious, as "cold-calling" is against the law in this jurisdiction and rarely done by authorised investment intermediaries.

In one instance a person about to make an investment telephoned the Central Bank while awaiting the arrival of a courier who was going to take his cheque. Informed that the investment company involved was not authorised to conduct business here, the investment was not made.

The bank can try to liaise between investors who have lost funds and regulators in foreign jurisdictions, in cases where the investment firm has links with the foreign regulator. However it is very rare for the investment firm to have any assets in the jurisdiction from which it is operating. Usually the firms operate from one jurisdiction but advise investors to send their money to a third jurisdiction.

It is believed there are people who work full-time as bogus investment intermediaries, travelling to different locations to establish short term operations which are immediately abandoned the moment there is any inquiry by a local regulator or the local police.

Some people who have contacted the bank have said they suspect persons who have contacted them before, have subsequently contacted them as representatives of different firms operating from different jurisdictions.

While in the main the callers seem to randomly select targets from telephone books, share registers and other public data bases, there have been instances which the callers have targeted people about whom they have very specific information, such as bank balances. It is not known how they get this information.

Overall, the Central Bank advises people contemplating making an investment through an investment intermediary, to ensure the intermediary is authorised to conduct business here, no matter how assured they feel. Investments made through unauthorised firms are not covered by the Investor Compensation Scheme. The bank can be contacted at 1890 200 469.