Ludlow Councillor Andy Boddington said around 10 people are thought to be involved in an organised ploy to extract cash from unknowing Good Samaritans who believe them to be genuinely homeless.
Shropshire Council's housing services manager, Laura Fisher, said the authority is aware of a group which is regularly begging and is working with West Mercia Police to find out the circumstances.
Councillor Boddington, who represents Ludlow North, raised the issue at a meeting of the council’s communities overview committee today.
He said he believed several beggars seen recently in Ludlow were victims of this exploitation, and had become embroiled in order to pay off debts.
As of this week council figures record only one rough sleeper in Ludlow.
Councillor Boddington asked: “What action is the council taking and what action can it take to tackle modern day slavery among people on the streets of Shropshire?
“We have people on the streets of Ludlow and elsewhere who are clearly part of organised gangs.
“There is no doubt that they are in slavery roles, in debt, and told how how to beg.
“Irrespective of whether these vulnerable people can be classified as rough sleepers, how can we as a council tackle a modern day slavery situation on our doorsteps?”
Ms Fisher said the authority was working with police to address the problem.
She said: “We are aware of a group of individuals in Shropshire as we have had reports from a number of our market towns of them begging on a regular basis.
“Shropshire Council is working alongside West Mercia Police to fully understand the circumstances of all these individuals, to offer advice and assistance when necessary, and where appropriate to take enforcement action.”
Ms Fisher said exploitation including modern slavery was a priority issue of the Shropshire Safeguarding Communities Partnership, for which the council acts as statutory partner.
She added: “The partnership has recognised the importance of developing a detailed and dynamic multi-agency profile of where in Shropshire and upon whom exploitation is taking place, and ensuring that there is a robust multi-agency response to exploitation.
“The partnership recognises that public awareness of and community involvement in tackling exploitation in local communities is vital to this response.
“The partnership has a dedicated exploitation priority group which is chaired by the assistant director of children’s services.”
Ms Fisher said anyone with concerns about an individual they believe to be a victim of exploitation or slavery should contact the police, and inform the council too if the person is a child or adult with additional needs.
Councillor Boddington said this was not the first time such exploitation had been seen in the area, but that the issue was at risk of worsening due to the coronavirus pandemic.
He added: “We currently have, we believe, 10 people in one gang, for want of a better word, and some of them I personally believe are in slavery positions.
“Certainly in the gang before we know that was the case.
“I think this is something we need to prioritise and push up the agenda a bit.
“It’s more in the Marches now because they are not in the towns because there is less of a market, and because of Covid-19.”
People with concerns about someone they believe is being exploited can contact police on 101, or call 999 if they are in immediate danger.