The Consumer Council received five complaints on sales misconduct in Loco London Gold Margin Trading in the first 10 months of the year.

Complainants said they received unsolicited calls from an agent asking about their investment goals or experience, and were persuaded to open a discretionary account with oral promises of "returns guaranteed". However, they found their investment a total loss within a short period of time.

This was because some agents were allegedly engaged in active buying or selling for as many as more than 30 times in a single day, breaching the trading frequency - up to two times per day - the complainants requested. In some cases agents asked for access to the complainants' Loco.

The council warned as London gold is traded on a bilateral basis in the over-the-counter market, it is not subject to specific regulation.

Unwary investors are also extremely vulnerable to investment firms which are not registered members of the Chinese Gold & Silver Exchange Society - the self-regulatory body in the trade.