BUSINESS people paid an estimated £1.5 million to a group of, "conmen" operating a Dublin-based consultancy company, the House was told.

The claim was made by the Fianna Fail deputy leader, Ms Mary O'Rourke, who named the company as Oldfields. It had an office in Eden Quay and another in Lower Baggot Street and offered a service as a rates consultancy agency to business people, she said.

"This debacle is one of the worst examples of sharp practice that I have ever seen or heard of. It is beyond belief that such fly-by-night merchants would take in so many people."

She added it was astounding the company was able to operate within the law. Although representatives from the office of the Director of Consumer Affairs visited Oldfields on several occasions, they found no laws had been broken.

The company claimed it could reduce rates bills for firms and charged £245 plus VAT in advance for its service, said Ms O'Rourke. Several thousand business people paid £300 each to the firm in response to a sales pitch delivered by innocent young people employed at minimum wages.

Not surprisingly, last month the company hurriedly abandoned its Dublin offices, she added, leaving most clients highly critical of the service provided. In some cases the rates actually increased. Only a few hundred appeals were lodged in the valuation office.

One of the company's directors was reported to be the subject of a fraud squad investigation in Britain relating to a controversial time-share investigation.

She warned business people to be alert and seek advice before paying in advance when unsolicited approaches were made by unknown operators. She had cause to suggest that the people behind the Oldfields operation had resurfaced under another guise elsewhere in Dublin, but she had not been able to have this confirmed.

Ms O'Rourke urged the Minister of State for Science and Technology, Mr Pat Rabbitte, who has responsibility for consumer affairs, to see if there was any loop-hole to be plugged to prevent a recurrence.

Mr Rabbitte said he understood that following an initial investigation the Director of Consumer Affairs had found no breaches of consumer legislation at the time off his investigation, and as the traders had entered freely into contacts with the company, the issue was primarily one of contract Law.

He added he was not aware of anything arising from recent press reports relating to Oldfields that would give rise to the necessity to bring forward proposals to amend the Companies Acts. "Having said that, however, if there are lessons to be learned from the Oldfields case, I will certainly be more than happy to have them looked at by my officials and, if necessary, examined during the course of the second phase of the company law review group"

Mr Rabbitte said certain information relating to companies was accessible in the companies' registration office.