There have been fewer than 10 convictions under the current act
Mediums and spiritualists fear changes to laws regulating the industry could leave them open to malicious civil action by sceptics.
The union representing spiritual workers is to lobby the government over changes to the industry's regulation.
The Fraudulent Mediums Act is due to be repealed next month and replaced by new EU consumer protection regulations.
The British Humanist Association said the change offered vulnerable people greater protection against fraud.
Under the 1951 Fraudulent Mediums Act, prosecutors have to prove the medium or healer had intended to be fraudulent in order to secure a conviction.
But under the EU Unfair Commercial Practices Directive, which comes into force in the UK on 26 May, it will be the medium's responsibility to prove they did not mislead or coerce vulnerable consumers.
The Spiritual Workers' Association says making mediums subject to the consumer-protection regulations does not recognise spiritualism is a religion.
It plans to lobby the government over the issue on Friday.
Its founder Carole McEntee-Taylor, told BBC News: "The problem is that it's turning spiritualism the religion into a consumer product, which it is not."
She said the change in law left mediums more vulnerable to prosecution.
She said: "The Fraudulent Mediums Act protected the medium because it meant person receiving the information was taking personal responsibility.
"They would have to prove the medium was fraudulent or giving them advice which make them make a decision which would cost them money."
The British Humanist Association's chief executive Hanne Stinson, said the current law was not fit for purpose.
She said: "We hope that the new regulations will make real changes to the current situation, where psychic practitioners are permitted to make completely unsubstantiated claims and to take payment for their services, without fear of legal action.
"It is high time that this industry is better regulated, with adequate protections for consumers."
Susie Collings, of the College of Psychic Studies welcomed the new rules, saying they would tighten standards, discourage "less than ethical" practitioners and make it easier for the public to understand what to expect from a reading.
However, she said: "There is always the possibility that mediums will be targeted by people intent on making money by suing what they see as easy targets and that is a big concern for the individual."