The FSA is writing to more than 38,000 people who may be targeted by share fraudsters.

The Financial Services Authority (FSA) has issued a stark warning to potential victims of so-called ‘boiler room’ fraud to be wary of scammers after uncovering a master taregt list of more than 38,000 people.

Share fraudsters, or ‘boiler room’ fraudsters use high-pressure sales techniques over the telephone to convince people to buy non-tradable, overpriced and often non-existent shares.

The FSA is now writing to more than 38,000 people who have appeared on a master list for potential scammers to advise them on how to avoid being duped.

Jonathan Phelan, the FSA’s Head of Unauthorised Business said: “This is the biggest list we’ve ever recovered and by acting quickly and contacting every single person on it we’re hoping we can stop people losing money.

“Boiler rooms fraudsters often sound professional so it’s easy to be drawn in by their overblown claims and give them money to invest. The reality is however that the shares are worthless or don’t exist and the money is lost forever.”

One victim, Jimmy Gill a pharmacist from London, told the BBC that he had lost more than £40,000. “The first transaction was for only £5,000, a dry run, and then the big one was for £35,000.”

The FSA says there are a number of steps people can take to avoid being caught out:

•    Hang up the telephone if you receive an out of the blue call offering you shares
•    Check the FSA Register to see if the person selling shares is authorised to do so
•    Call the company back using the details on the FSA Register to verify their identity
•    Report any company that cold calls you to sell shares to the FSA or the police

Earlier this year the FSA reported a significant rise in the number of people reporting this type of crime. In 2009 3,100 people contacted the organisation to say they had received a call, with 734 of those falling victim to the perpetrator, losing an average of £24,000 each, a staggering £17 million in total.

The FSA and police, however, believe the problem is much worse than figures show, with only an estimated 10% of victims actually reporting the crime. The City of London Police, which launched Operation Archway to tackle the growing problem of share fraud, says that the biggest individual loss it has found so far is £1.2m.

If you are worried that you have been targeted by boiler room fraudsters call the police or the FSA directly on 0845 606 1234.