YOU rush out for a sandwich and catch the eye of a cheerful, good-looking young man wearing cool trainers. He engages you in passionate conversation and, before you know it, you've signed a direct debit mandate for Amnesty International.

As the UK's biggest charities swap flag days and collection tins in favour of the brightly-coloured teams of clipboard canvassers that have become a familiar feature on the streets of some of Scotland's cities, there are serious concerns about the ethics and long-term effects this latest method of fundraising may have.

The tabard-clad canvassers, who appear to be committed volunteers fuelled by youthful idealism, are, in fact, employed by Brighton-based private fundraising company The Personal Fundraising Partnership. One day they will be recruiting members for Greenpeace, the next, Save the Children or Barnardo's.

It is estimated that #1m donated by Scots this year will be diverted into the bank account of PFP. The firm opened its Glasgow office last year and, through canvassers who are paid a flat rate, is signing up about 3200 donors a month on direct debit agreements. For every new recruit, the charities pay around #30 to PFP.

The practice has brought into focus the ethical question of how acceptable it is for private companies to profit from soliciting money for charities - and, as an inducement, offering to double a managing director's salary to #70,000 a year for achieving 'on-target earnings'.

Under existing charity laws in Scotland, which differ from England and Wales, the company has no obligation to tell the public that it gets a fee for every person it signs up.

Chief executive of the Scottish Council for Voluntary Organisations Mr Martin Sime supports the introduction of a fundraising regulatory framework and says the public has a right to know where its money is going.

''We need regulations on the soliciting of donations from public that informs them who these people are, who they work for, and the relationship they have with the charity. Under the current situation, the public are not being helped to make informed choices,'' he said.

He also feared the practice would benefit the big charities that can afford to hire professional, fundraising firms at the expense of Scottish and local charities.

''The more professional and privatised fundraising gets, the more smaller and local charities are challenged. With 26,000 charities in Scotland and only half a dozen using face-to-face fundraising on the street, the others will be hit. The level of public donations to charities is pretty static. There is clearly not space for everybody.''

The Scottish Charity Review Commission is investigating the lack of regulation on direct debit canvassing as part of an independent inquiry to review charity law.

The McFadden Commission will consider the ''legal loophole'' which enables paid canvassers to stop people in the street and ask them to sign covenants or direct debit forms without having to apply for a licence. The commission was established amid concerns that Scotland was seen as a ''soft touch'' by professional fundraisers.

The consultation period, which ends next week, has received around 1000 responses about face-to-face fundraising.

The secretary of the commission, Mrs Eleanor Mitchell, said there was overwhelming support for regulation.

''We are still at a very early stage but it is something the commission will have to look at. There is overwhelming support for us to do something.'' The commission will present its report to the Scottish Executive in April 2001.

Private fundraising companies are concerned about the threat of legislation and have recently drawn up a code of self-regulation.

With four new charities recognised every working day in Scotland, and one new voluntary organisation registered every 20 minutes in Britain, all engaged in an increasingly competitive fundraising war, it is not surprising that those that have used face-to-face fundraising regard it as an overwhelming success.

They claim it has enabled them to break into the previously elusive younger market and say it is extremely cost-effective. However, some acknowledge that the practice has a limited shelf-life and admit that they are exploiting it while they can.

Amnesty International recruited an additional 5000 members in Scotland by using the technique.

Mr James Hale, marketing manager with PFP, said practitioners of face-to-face fundraising maintained high standards.

''Our fundraisers only talk to passers-by who express an interest or establish eye-to-eye contact. We have moved on from the days when people just put money into a collecting tin. It is an education type of thing.

''Charities can inform donors about where the money is going and what the charity is doing. It is about regular committed giving which is the real attraction.''