People who fall victim to share scams lose £20,000 each on average, according to the City watchdog.
Fraudsters work from boiler rooms
The scam involves using "boiler room" tactics - cold calling members of the public offering shares, the Financial Services Authority (FSA) said.
Usually, the shares on offer are either worthless or do not exist.
Boiler rooms, targeting UK consumers, are based overseas and so are outside the jurisdiction of the FSA, they also often elude local authorities.
In a survey of callers to its consumer contact centre, the FSA found that more than a quarter of people had been approached by four or more boiler room operations.
Eight out of 10 boiler room victims were male, many were experienced investors.
Most victims of the scam hailed from London and south east of England.
Of the victims, 13% had been conned by more than one boiler room while three victims each reported losses of over £100,000.
People who had fallen prey to boiler rooms were unlikely to get their money back the FSA said.
"Boiler rooms are not authorised by the FSA, and are based abroad outside our reach, so victims are not protected by the financial services compensation and complaints schemes," Jonathan Phelan, Head of Retail Enforcement at the FSA, said.
"Our strongest tool is to make people aware of the scam," Mr Phelan added.