A couple of years ago, Boiler Room, a film starring Ben Affleck, showed how young hustlers get rich quick by cold-calling potential clients to sell shares in often unknown companies. The title refers to a place where "stock jocks" manipulate their way to a not-so- small fortune by piling the pressure on investors.

It might seem like a far-fetched scenario, but the Financial Services Authority (FSA) yesterday issued a warning that such practices are occurring in the UK. Complaints have flooded in from consumers who have dealt with unauthorised firms. Based overseas, such firms are not regulated by the FSA, but they have been targeting UK-based investors in the past 12 months.

The trouble is that people don't realise they are dealing with a company outside the jurisdiction of the City watchdog - because many of them appear to be based in London. It is only when a problem occurs, or if the firm collapses, that investors realise the horrible truth: they can't make a complaint and don't have access to a compensation scheme.

Unauthorised firms often use a publicly available share register to target UK investors. This is usually done in a letter, perhaps including an invitation to send off for research on a firm whose shares you already own. By returning the form, you will be giving the company your consent to contact you directly about other investment opportunities; as with many scams, this condition is hidden in the small print.

Often the firms have UK addresses and telephone numbers but calls are automatically diverted to an overseas number - the boiler room. The address may also be one that forwards your mail to the company abroad. The UK contact details create an air of respectability, giving prospective investors a false sense of security.

The company's salespeople usually contact would-be investors by phone, using hard-sell tactics. Even experienced investors have been pressured into buying shares in this way.

Once they've buckled and bought the shares, investors face considerable delays in getting hold of their share certificates. And when they try to sell them, they often have problems obtaining the proceeds from the sale, or are put under pressure to re-invest the money.