The Financial Services Authority estimates that each year 30,000 people fall victim to such frauds in the UK at a cost of £300m.

This is a particularly nasty fraud the victims are often reluctant to come forward , embarrassed that they have been "so Stupid" as they see it.   These fraudsters are clever sophisticated individuals who have developed techniques and approaches over long practice which encourages a slow build up of trust.  The average victim loses £20,000 and many a great deal more.  It has been the cause of marriage break ups , suicides and financial misery for many of the victims.

Typically the fraudulent Broker will telephone and persuade a victim to purchase shares in a company not listed on any of the main exchanges.

The regulator said it is also investigating a type of share fraud where imposters pretend to be legitimate brokers looking to trade on behalf of shareholders  where the fraudster contacts people who are on shareholders' registers. An offer is made to buy or sell shares in the company in return for a fee. Once the fee is sent, the broker disappears.

A spokeswoman for the FSA said these fraudsters were "cloning legitimate firms to use their details". She added that the FSA has updated its advice to shareholders who receive cold calls, urging them to telephone the number of the registered company, as opposed to the number given out by individuals.

The fraudsters will often claim to be a perfectly legitimate firm that is registered with the FSA (which you can easily check see our firm check page). The advice is to check with the FSA register and use the phone number there to call the firm.