A debate about how to tackle the growing problem of so-called "boiler room" scams will take place in the House of Commons today, with a view to creating tougher measures to prevent the schemes.
Boiler room scams usually work by piling pressure on investors to put their money into the shares of unknown companies. The salesmen, normally based overseas, use high-pressure tele-sales to persuade individuals to part with their cash. In most cases, the shares are vastly overpriced, restricted for onward sale and have little or no realisable value.
In the UK, thousands of people have fallen victim to the scams, losing thousands of pounds in the process. The Association of Private Client Stockbrokers and Investment Managers (Apcims) has been campaigning for a clampdown on the schemes, as well as increased co-operation with international financial regulators.
David Bennett, the chief executive of Apcims, said: "We are looking for a two-pronged approach. We want to see international co-operation to maximise efforts in tracking and shutting down of boiler rooms. At the same time, there needs to be co-ordinated action between the FSA, consumer groups and trade associations to help inform UK nationals so they can protect themselves."