LOAN sharks have targeted people on some of the city's most deprived estates.

They are believed to have been working in Bestwood, Aspley, and Broxtowe Estate, taking advantage of people in the run-up to Christmas.

Some are thought to have been operating unlawfully without a proper licence and the East Midlands Trading Standards Illegal Money Lending Unit is now investigating after receiving information on loan shark activity in these areas in the past three months.

Steve Ward, partnership and development manager for the unit, said: "There appear to be two or three operating in each area.

"If you get in debt to a loan shark now, then the post-Christmas period will be a nightmare."

He said amounts offered by the money lenders could vary from £50 to £50,000 but would not go into detail on the amounts being taken out in Nottingham.

"People fall for loan sharks because it's easy cash. There's no credit check," he said. "They will encourage you to loan more than you need. They will initially offer quite an easy repayment period. It will often result in paying back the loan over many years."

Many of the loan sharks target people they already know.

"We have found that 91% of victims knew the loan shark before they borrowed the money; 47% called them a friend before borrowing the money," said Mr Ward, who issued a stark warning to anyone thinking about borrowing from an illegal money lender.

"People do not realise that loan sharks operate an interest-only policy," he said. "This may be £50 a week until you find £500 cash to pay off the £500 debt. If you default, then they say 'pay £100 a week'.

"They make it up as they go along. They can't take you to court as they are illegal so all they can use is fear, threats and intimidation."

There is also believed to have been an increase in lawful loan sharks in the county in the run-up to Christmas. Legally, they are doing nothing wrong but offer loans with huge interest rates.

One former debt collector, who worked for a legal loan firm which charged annual interest rates of up to 200%, contacted the Evening Post to urge people not to be tempted.

He said: "We were encouraged to push for sales, i.e loans, to any family who wanted one, whatever their circumstances. The problems were in the tactics in getting the customers to pay it back."

Agents were encouraged to keep calling defaulters back until they could give any payment and if they continued not to pay, a visit from "the manager" followed and then "threatening letters" would start to drop on the door mat.

He added: "I know it's a struggle but think again before getting a loan. Problems start as soon as you sign on the dotted line."

While the illegal money lending unit has yet to make arrests in the city, two suspected loan sharks were arrested in the Meden Vale area of Mansfield on November 19. Two properties were searched. Both men have since been released on bail.

Formed in 2007, with guaranteed Government funding until at least March 2011, the unit is staffed by police and trading standards officers.

It focuses on illegal lenders and receives around 20 calls a month on loan shark activity across the East Midlands. Similar units operate across the UK, including London, Birmingham, Bristol, Cardiff, Glasgow and the North East.

To offer loans, a lender must have a Consumer Credit Licence. Anyone caught lending illegally could face up to two years in prison.

Lenders must also pursue repayments in a lawful manner, using the courts if necessary.

Anyone who feels they are a victim of an illegal loan shark or has information regarding their activities, can call the unit's 24-hour hotline on 0115 851 0351.

guy.woodford@nottinghameveningpost.co.uk