Tenants 'ripped off' by letting agents keeping deposits
- 27 February 2014
- From the section Front Page
Some letting agents are fraudulently taking thousands of pounds from tenants as a holding fee, not letting them move in and keeping the money, a Newsbeat investigation has found.
Trading standards authorities in England said 487 such cases were reported from January 2011 to September 2013.
The charity Shelter said the numbers were "just the tip of the iceberg".
It says letting agents need much stronger regulation.
A Freedom of Information request found that 71 of the 200 trading standards teams in England had received at least one complaint about this issue.
The Trading Standards Institute (TSI) said the way information was recorded meant that the real number of victims could be much higher.
Campbell Robb from Shelter said: "Surveys we have done in the past show a quarter of people who have been ripped off don't bother reporting it, as they know nothing is going to happen."
The Freedom of Information request - which asked how many complaints had been seen about letting agents charging holding deposits or other admin fees, but not letting prospective tenants move in and refusing to give them their money back - received 113 responses.
In some cases the landlords never existed, while in others the agents were stealing money from landlords too.
But 75% of the teams that had received complaints admitted they had not taken any action. Some said they could not intervene because it was a civil matter, which is what some victims said the police had told them too.
Rachael Kennedy, 22, and two friends paid a letting agent a total of £1,800 as a deposit for a home.
"It was the day before we were due to move in that he decided to pull out and told us he would pay the deposit back, which obviously he never did," she said.
Newsbeat discovered that trading standards officers had been investigating this particular agent since last summer - other alleged cases date back as far as 2009.
He has changed the name of his company several times since then but is still in business. Newsbeat asked him repeatedly for an interview but he has refused.
The TSI said cases involving rogue letting agents were becoming a national priority.
Barking and Dagenham Trading Standards took one agent to court, leading to a three-year prison sentence.
Cenred Elworthy, who worked on that investigation, said he hoped it would inspire other teams to intervene.
But he added: "We're a small service, an ever-decreasing service. Like all public services we are operating with ever-decreasing resources."
In Scotland it is illegal for letting agents to charge holding fees. The Welsh government is planning new laws to crack down on rogue agents, while there is no regulation at all in Northern Ireland.
The coalition government wants to bring in changes later this year that would require all agents in England to sign up to an independent scheme, meaning they could be forced to pay compensation if things went wrong.
But this plan "really isn't strong enough", Mr Elworthy said. "We need the power to go into lettings agents, look at the books and if anything is not right, take them to court."
Shelter wants more regulation so letting agents have to follow the same rules as estate agents, explaining the problem was that "pretty much anybody can set up a letting agency".
"The government is just not taking those nine million people in the private rented sector seriously enough," Mr Robb said.
"We need national government taking the lead on this, regulating letting agents much more strongly, local authorities following behind, prosecuting bad behaviour and making it clear it is just not acceptable to be stealing money in this way."
Housing Minister Kris Hopkins said: "Such activities are already illegal and I would urge anyone facing such unacceptable practices to contact their council's trading standards department.
"Councils have powers to prosecute such illegal behaviour."
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