Families have gone to court to free their children from professional football club contracts, youth football campaigners The Real Grassroots told Holyrood's Public Petitions Committee.
John Murray, who has been involved in running the youth academy at Heart of Midlothian FC, said he lets children go if their family circumstances change but that other clubs have different principles.
The Scottish Football Association said clubs must safeguard their investment, particularly when money has been spent in youth development, but said they can intervene if clubs are found to be "abusing their position".
But Real Grassroots founder Willie Smith, chairman of Glasgow's Hillwood Boys Club, said there are two cases pending where parents have been forced to go to court.
SNP MSP Chic Brodie said "business speculation" on young people is "Dickensian" while SNP colleague Angus MacDonald said it was "crazy" to let young players sit idle for financial reasons.
Mr Smith said: "A case had almost gone to court until a professional football club withdrew from holding the player on compensation and let him go for nothing.
"We are currently waiting on word from the Legal Aid Board on behalf of another player to take a club to court over refusal to release him from his contract. We have got another one pending.
"In both instances the parents exhausted the opportunities with the clubs first."
Co-campaigner Scott Robertson, a football coach, cited testimony from a law firm, world players' union FIFPro, Children's Commissioner Tam Baillie, the Scottish Child Law Centre and former First Minister Henry McLeish to support their contention that the system is "flawed" and that "retaining players after they have expressed a right to leave after a season is not acceptable and infringes fundamental rights".
"If a 13-year-old player signs a registration form for a boys' club, should he decide halfway through for family reasons he wants to leave or move somewhere else, or it is put upon him for family reasons, he can do so in 28 days if he writes to the Scottish Youth FA," he said.
"Under the same registration form he cannot exit from Airdrieonians, Hearts, Hibs or Celtic. There is no such get-out clause."
Mr Murray said: "I would be appalled at a club keeping a player who has moved house. I'm not saying it doesn't happen but we all have different principles.
"I certainly wouldn't keep a player that's moved house, but that's my individual club, I can't speak for Rangers or Celtic."
Andrew McKinlay, director of football governance and regulation at the Scottish Football Association, said: "For family reasons, where there have been issues and clubs maybe haven't had the same principles John has talked about, there has been a couple of times when we have been asked to mediate and generally we can find a situation where we can compromise.
"We are allowed to cancel a registration if it comes to it. We don't use that lightly but in scenarios where it is obvious that the clubs are abusing their position then we have the authority to do that."
Mr Brodie said: "This is almost like a Dickensian novel.
"This is not about anything other than pure business speculation, using young people and limiting their ability to do the thing they enjoy most."
Mr MacDonald said: "We heard an allegation that young players are not playing because clubs can't agree on compensation. It just seems crazy if there are players sitting idle."
Mr McKinlay said: "That's why often agreement is reached that no compensation is paid or a lesser amount is taken by the clubs, but there is an amount set based on reimbursement of training costs for clubs that have spent a lot of money."