Prime Minister Bruce Golding has, quite appropriately, warned investors in the myriad financial schemes offering extraordinarily high interest rates, that there will be no bail-out if they collapse.

The Government needs to reinforce the message and hopefully the warning will be heeded by those investors who appear to be putting logic behind them and placing their savings at serious risk.

In the normal course of things, it would not be expected that sensible investors would commit their funds to lenders who have not published audited accounts and about whose business they have no information. Yet, that is precisely what seems to be case with the more than 20 so-calle investment schemes that offer returns way in excess of traditional financial companies.

Perhaps these schemes have business models beyond the grasp or even the most astute and savvy entrepreneurs and captains of industry. But, on the face of it, something very unusual is happening.

Stripped of the facade, these schemes, essentially are borrowing the funds of the people who park their cash with them. And borrowers do not, in the normal course of business, pay excessively high interest rates unless they have to. Indeed, if a borrower is running a profitable business and can show this by having creditable accounts, he is able to borrow at low-interest funds from many sources. High interest rates are indicative of high risk.

The question, therefore, is why do these schemes feel themselves driven to offer extraordinarily high rates? We do not know this to be the case, but there are suggestions that several of these outfits suggest the profiles of pyramid schemes, the characteristics of which include:

Little to no information offered about the borrowing company's financial performance.

Vaguely phrased promises of limitless income potential.

No product.

An income stream that chiefly depends on the commissions earned by enrolling new members or the purchase by members of products for their own use rather than sales to customers who are not participants in the scheme.

A tendency for only the early investors/ joiners to make any real income.

Assurances that it is perfectly legal to participate.

Obviously, a pyramid scheme is a non-sustainable business model. Over 90 per cent of the people who get involved in pyramid schemes never recoup their initial investment. The people at the bottom level of the pyramid, no matter how shallow or deep it goes, will always lose their money.

Whatever the real nature of these schemes, the past and present administrations have made statements warning of the risks investors face and stressing the fact that there is no insurance for these investments. Indeed, no government should be prepared to compensate any investor who faces loss arising from the collapse of these risky investments.

Yet, for all the statements, the Financial Services Commission has acted with unbelievable slowness in bringing these schemes under regulation.

Maybe their schemes have very plausible explanations for the capacity to offer these high returns, in which case it would be in their interest, and to the public good, if they released audited financial accounts so that investors can assess the level of risk that they face.