A loan shark lent up to £400,000 to vulnerable victims in a seven-year racket run from her home in Wolverhampton, a judge heard this afternoon.

Sarah Dixon charged annual interest rates of as much as 1,689 per cent while handing out loans of between £50 and £30,000 to around 30 clients and charged up to £600 a time for a missed payment, Wolverhampton Crown Court was told.

She took bank cards and PIN numbers from some customers and withdrew cash from their accounts to act as payment.

Prosecutor Mr Ben Mills said between March 2003 and November last year, Dixon lent hundreds of thousands of pounds.

Books found at her home indicated the final figure was £400,000.

Mr Mills said: “The people she loaned to were vulnerable and very desperate for money. They felt trapped in a spiral of debt.

“It was never fully explained to them what their interest rates were and when they would have to pay it back.

“She was running a business in the shadows of the economy which circumvented all the rules.”

Investigators found £9,000 cash, envelopes with names and amounts of money written on them which had been posted through her letter box, the court was told.

Loan books detailed transactions and scraps of paper torn from notebooks carried the pledges of clients to repay money, said Mr Mills.

He added: “The process was absolutely devoid of formality. This was a well-organised and clearly lucrative illegal money lending operation.

“Plainly she must have had access to large amounts of cash to be able to lend it.”

Mr Mills told how a woman called Cath had been told to repay £1,800 after borrowing £1,000 – which works out as an annual interest rate of 1,689 per cent.

Another victim had to pay back double on a £1,500 loan, the court was told.

People were allegedly sent threatening text messages if they fell behind with payments.

Dixon, of Cannock Road, Wednesfield admitted eight charges of illegal money lending and was due toi be sentenced later.