Three years on, the name Tony Taylor still causes investors to involuntarily clasp their wallets, but the consumer is still not well-protected from fraud or the misselling of financial products.

Mr Taylor disappeared in 1996 leaving £1.7 million of his investors' funds unaccounted for. His whereabouts are still unknown.

Many more cases of alleged fraud have come to attention since then, but increased consumer protection may only materialise when the single regulatory authority for financial services is implemented. While consumers wait for the protracted debate to end, prosecutions for fraudulent trading continue.

In June, Mr Patrick Foote of Irish Mortgage and Finance Bureau in Limerick was convicted and sentenced to the maximum of seven years last month. He was found guilty of defrauding 20 investors of £203,000 ranging in amounts from £270 to £97,000.

During Foote's sentencing, Justice O'Leary said he regretted that even if the accused was sent away for 1,000 years, it was not going to restore money to those who had lost it.

Despite the massive damage caused to the Irish investment industry by these scandals, financial companies and industry groups have been slow to voluntarily implement more consumer-friendly practices.

A worry factor in all this is the substantial number of new and inexperienced investors in the Republic following the Telecom Eireann flotation. Before the implementation of a single financial services regulator, the current inadequate level of consumer protection puts inexperienced investors at risk of misselling and fraud.

Private share ownership in Ireland: A study conducted by Goodbody Stockbrokers estimates that following the Telecom Eireann flotation, 13 per cent of the adult population now owns shares. This is more than four times the 3.7 per cent with shares in 1991. In Britain an estimated quarter of the adult population own shares.

If the Republic follows the British trend, then 27 per cent of those who bought shares for the first time will subsequently acquire shares in other companies.

Sources of financial/investment advice: Despite recent banking scandals the majority of people, 31 per cent, go to their banks for advice, according to the Goodbody survey. Twenty-eight per cent ask their solicitor or accountant for financial guidance, 15 per cent ask friends or relatives and 14 per cent go to a stockbroker.

Consumer protection for investments:

The level of consumer protection when purchasing a financial product or service depends on the product, the person from whom it was purchased and the laws governing that particular financial services area.

Some laws regulating these areas include: the Investment Intermediaries Act, the Insurance Act 1989, the Sales of Goods and Supplies of Services Act and the Consumer Credit Act.

Each area of financial services is overseen by either the Central Bank, the Department of Enterprise, Trade and Employment, an Ombudsman scheme, or a self-regulating industry group.

The Consumers Association of Ireland (CAI) calls this diverse regulatory framework The Mishmash because it is so confusing for consumers and even some individuals working in the financial services industry.

The Director of Consumer Affairs, Carmel Foley, said last week: "The uneven nature of protection for consumers seems to be due to the fragmented regulatory framework and I would urge the setting up of the single independent financial regulator as recommended in the McDowell report in the interest of consumers."

The McDowell report recommends that a new regulator be established to undertake all prudential and consumer regulation of financial services from banks and building societies to insurance companies, stockbrokers and solicitors. This authority would be an entirely independent organisation, separate from the existing main regulator, the Central Bank.

It also argues for a customer protection director within the new body and a statutory ombudsman scheme for all financial services.

The problem with the existing framework is one of complexity. For example, if an investor has a complaint about a financial product, then the complaint may be directed to the ombudsman for that particular area.

However, if the accusation relates to misselling then the self-regulating industry group in charge should be informed of the complaint. The Irish Brokers' Association represents insurance intermediaries and the Irish Insurance Federation covers the insurance companies.

The criss-crossing laws and numerous regulators mean some investment advisers fall through the protection net. The CAI has highlighted the lack of protection for consumers purchasing products through financial planners.

Those who provide investment advice and arrangements should technically come under the Investment Intermediaries Act. Under the Act, if the giving of advice is strictly incidental to a person's overall work, such as a solicitor or accountant, then it may fall outside the terms of regulation and compliance of the Act.

Fortunately, many professional organisations insist that their members have professional indemnity insurance and this goes some way to protecting consumers.

Investor Compensation: In 1998, the Investor Compensation Act came into effect and established the Investor Compensation Company Ltd (ICCL) to pay eligible investors who had lost money from an investment firm the lesser of £15,571 (€20,000) or 90 per cent of the loss. However, this only applies to companies registered with the Central Bank.

The ICCL covers losses associated with investment firms, stockbrokers, credit unions and investment or insurance intermediaries. When one of these firms collapses and is unable to return investors' funds, the ICCL will take complaints from clients or inform them that they are entitled to compensation. Clients have five months to file a complaint.

Last week the Irish Brokers' Association (IBA) announced an additional compensation fund for those investors who have suffered from misappropriation or mismanagement of funds by insurance brokers. The bonding scheme covers all 600 IBA insurance broker members and requires them to have a £100,000 bond with a maximum payout of £50,000 per client. The scheme operates in addition to the ICCL.

Although the scheme is a step in the right direction, if the broker fraud scandals of the past are anything to go by, the scheme will not go far enough to cover the majority of investors' losses. Financial spokesman for the Consumers Association of Ireland, Mr Eddie Hobbs, believes bonding is not enough. The IBA should join an Ombudsman scheme and disclose commissions in advance of legislation, he says.

"For a consumer to know whether someone is acting as their agent or as freelance for an insurance company, comes down to one thing - whether commission disclosure is on the table," Mr Hobbs says.

About half the life market and 70 per cent of the pension market is arranged by brokers and a high percentage of these are IBA members, he says.

Different regulatory regimes apply to insurance companies than to insurance intermediaries says the Irish Insurance Federation. Insurance companies and insurance intermediaries are not legally required to hold professional indemnity insurance. However, it is a requirement for IBA members.

Complaints relating to an insurance policy or claim should be directed to the Insurance Ombudsman after the complaint procedures have been exhausted at the company concerned. In 1998, insurance sales complaints to the insurance Ombudsman were up 15.5 per cent to 936 from 810 in 1997, many involved complaints of misselling. The Insurance Ombudsman is limited to making financial rewards in cases where the disputed sum is below £100,000.

Banks, building societies and credit unions are covered by the Ombudsman for Credit Institutions. As with all Ombudsman schemes, the company's internal complaint procedure must be completed before the Ombudsman will accept the investor's complaint. The office has to power to make financial awards up to £30,000.

Financial Adviser Education and Training: Fraud makes headlines, but misselling is more widespread. Even though the lack of adequate financial compensation for defrauded investors is worrying, the lack of educational standards for those giving investment advice to consumers is of greater concern.

In the insurance sector, some minor efforts have been made through the introduction of basic competency exams given by the industry.