THE Sunday Times Money desk has been inundated with letters from readers who have lost up to £100,000 after investing through boiler rooms — so-called because of their hard-sell tactics and high-pressure sales targets.

Boiler rooms — the theme of a film of that name six years ago — try to persuade investors to buy shares, but there are also scams involving options, futures and currencies. Some offer shares that promise huge returns but turn out to be worthless; others sell shares in companies that do not even exist.

One similarity, however, is that they are generally extremely professional outfits that target seasoned investors, whose contact details are often obtained from shareholder registers (see below).

Boiler rooms originated in the US, but Money readers also report being targeted by firms claiming to be based in continental Europe — or Britain.

One investor, who does not want to be named for fear of reprisals from the European boiler rooms he dealt with, has seen the value of his investments plunge by 90% over the past two years, leaving him with a total loss of about £100,000.

The Financial Services Association (FSA) recommends you call its helpline (0845 606 1234) to check firms are authorised in Britain before buying shares, as only then can you approach the Financial Ombudsman Service (FOS) if you feel you have been misled. It also means that any losses resulting from the broker going bust will be covered by the Financial Services Compensation Scheme.

However, investors who have lost out after buying US “Regulation S” shares through an FSA-authorised company, Pacific Continental, are sceptical about the watchdog’s advice.

Regulation S allows unlisted US companies to raise funds by selling shares to overseas investors without listing on the stock market. Shares of this kind carry high risk, and investors are likely to find it difficult to check their status and liquidity. There is therefore a good chance you could lose part — or all — of the money you invest.

The shares are typically issued at a discount, although only a small amount of this is generally passed on to investors — and they cannot be sold back into the US for at least a year.

Even then, you must pay for a US lawyer to remove the marked restriction from your share certificate, and there is no guarantee that you will be able to trade them on.

Eleanor Hughes of the FSA said: “The legal fees for doing this might add up to more than your shares are worth, so check their value before forking out.”

Robert Jackson, a retired civil servant from Beckenham in Kent, stands to lose up to £40,000 after investing in Regulation S shares through Pacific Continental and in British companies through a broker, Hoffman Philips, that the FSA has named as a possible boiler room.

Jackson, 73, said: “I was contacted by both brokers about three years ago and was persuaded to invest about £16,000 with Hoffman Philips, which I believed to be a London firm, before I found out it was based in Spain and was on the FSA list of suspected boiler rooms.