The Minister for Enterprise, Trade and Employment, Micheál Martin, was yesterday urged to carry out a review of the Pyramid Selling Act 1980, after it emerged that gardaí estimate that up to €12 million could have been lodged in a pyramid-type scheme operating in west Cork.
The Fine Gael spokesman on Justice, Jim O'Keeffe TD, said current legislation may not be sufficient to cover the type of scheme that has been in operation under the name Liberty Systems in west Cork for the past number of months.
Mr O'Keeffe said the legislation defines schemes as "trading schemes". But the scheme which has come to light in west Cork involves people giving "gifts" of sums of €5,000 and €10,000 to buy a share of one of eight "balls" from the promoters.
"I think those promoting this scheme have made a solid effort to get around the legislation - they are using what is technically called 'a gifting scheme progression', and I'm not sure that the 1980 Act, with its reference to trading, covers this type of development," he said.
Mr O'Keeffe also expressed concern that the penalties in the Act are inadequate.
"I'm concerned about innocent, vulnerable people who can ill afford to hand over this kind of money, in many instances borrowed money, and they will be caught very badly," he said.
Labour spokesman Brendan Howlin TD also called on Mr Martin to amend the law to outlaw "gifting schemes". He said that legislation has been introduced elsewhere in Europe to ban such schemes.
The call for legislative change came as it emerged that gardaí in west Cork have received reports that up to 40 pyramids, each with the potential to take in €300,000, may be in operation in the area.
Detectives, who recently went undercover at information meetings about the scheme in Bandon, believe that if these figures are correct, then at a conservative estimate up to €12 million may have been lodged with the scheme by people in west Cork.
They have begun tracing back the development of the scheme, and believe that it originated in the Bantry area in the early autumn. It has subsequently spread to draw in people in Drimoleague, Skibbereen, Dunmanway, Clonakilty, Bandon and Kenmare in Co Kerry.
Gardaí in west Cork, who have been contacted by financial institutions in the area worried about the level of borrowing, have publicly warned that anyone involved in promoting the scheme could face prosecution under the 1980 Pyramid Selling Act.
The Irish Times has learned that at least three information meetings, which were by invitation, were cancelled in west Cork and Cork city on Thursday night after those involved in organising them learned that gardaí were monitoring the meetings.
Meanwhile, Garda and Customs sources have confirmed they believe over 60 people from west Cork are departing from Cork airport this weekend to bring money collected for the scheme to Munich to hand over to unnamed persons involved in the scheme.