Nearly all scam and fraud victims "suffer in silence", councils say, but the jailing of a lettings agent shows billions of pounds could be saved.
Only 5% of scams are reported, owing to victims' embarrassment and innocence, according to the Local Government Association (LGA).
But it pointed to the conviction of rogue lettings agent Martin Marcus as evidence of a fightback.
Victims of Marcus have told the BBC of sleepless nights after being defrauded.
Teacher Hannah Casey, 27, lost hundreds of pounds after paying a deposit with a friend for two rooms in a three-bedroom flat, only to discover seven people were already living in the property.
She confronted Marcus and, in a conversation that she recorded, he promised "on his children's life" that he would return the money. She has never received it.
"I was devastated. I could not sleep and feel sick," Miss Casey said.
"He was preying on people who he thought were vulnerable, like us - two young women. But we work too hard for someone to take money like that and steal it."
Following a four-year investigation by Barnet Council Trading Standards, Marcus, 52, of Ashfield Avenue, in Bushey, was jailed for four and a half years after admitting five counts of fraud at Harrow Crown Court. Confiscation proceedings, attempting to retrieve some of the victims' lost money, have begun.
The LGA estimates that £9.7bn is lost to UK residents through fraud each year. More than five million people were victims last year, but only 5% of cases are estimated to have been reported.
Cases have included a bogus faith healer who was jailed after defrauding women with a story about using their fees to pay for potions and to sacrifice crocodiles. Another rogue trader was jailed after targeting churches, schools and charities in a car park line-painting scam.
"Trading Standards teams see at first hand the devastation but victims should not suffer in silence or feel embarrassed," said the LGA's Simon Blackburn.
"By reporting a scam, people can help someone else avoid being a victim."
Victims have often spoken about the difficulty of getting the authorities to take on their case, and Hannah Casey said she struggled for assistance in her dispute until she contacted her local MP.
Miss Casey, a music teacher, was among tenants and landlords who were scammed out of a total of £220,000 in rents and deposits by Marcus, according to Barnet Council.
She and a friend responded to an advert on an internet portal offering two rooms in a flat. They were shown around by an agent, agreed to move in, paid an £800 deposit and £150 administration fee, and handed in their notice with their landlord at that time.
Alarm bells started to ring when Miss Casey discovered that the money had not been placed in a deposit protection scheme.
Worse was to come when they decided to go back to the flat without the agent.
"We decided to meet our new housemate, knocked on the door and explained that we were moving in," she said.
"From behind the door they said, 'No, you won't.' There were two couples living in one room saying they had been scammed too."
Only after she had paid did she read warnings about Marcus on internet message boards. "When I Googled him, I nearly had a heart attack," she said.
During numerous attempts to have her deposit returned, she confronted Marcus who arrived "tipsy" at his office, and at one stage she was given a cheque which bounced.
Eventually she returned to the agency office only to find it was shut, with a bailiff's notice on the window.
A court heard that Marcus was responsible for "an elaborate con trick" that included offering properties to tenants that he had no right to let out, and using a variety of methods and excuses for holding on to thousands of pounds in deposits and rent.
At one stage he even tried to let out the house he, himself, was in the process of being evicted from, having not paid the rent.
Landlords and tenants were told that their money was held in ringfenced clients' accounts, but investigators discovered payments from these accounts were made to Marcus's son, to an airline and a gym, and withdrawals were made at cash machines in Spain.
Over the course of six years, Marcus used aliases including Jeffrey Lewis, Martin Champ and Robert Martin, as well as a number of company names including JMG Residential Ltd, Interlocate, Corporate Relocation, and Churchill Residential.
He was in financial trouble himself. Analysis of bank accounts showed that he had taken out numerous payday loans, and victims such as Miss Casey are concerned that little will come in terms of refunds or compensation.
Doreen Wright, of Sevenoaks in Kent, was among the landlords who lost money to Marcus. She had agreed to use the agent for a property she was letting out in north London.
Having been promised that a corporate client had been found, a young couple emerged as the tenants and Mrs Wright told the BBC News website that she never saw the initial three months of rent that they had paid.
"It was harrowing and very worrying," she said of the whole experience.
"The upshot is that I will never trust my own judgement now."
Barnet Trading Standards said that it received a high level of complaints about lettings agents. Figures from Action Fraud show that reports of rental fraud in England and Wales rose from 2,216 in 2014 to 3,193 last year.
Problems are particularly acute in London, where there is significant demand from potential tenants. Cases have included ghost-brokers, as revealed by a BBC investigation earlier this year, who try to rent out properties that they have no access to.
The trade body for lettings agents believes "frequent" reports of fraud mean there should be a compulsory accreditation scheme for agents.
David Cox, managing director of the Association of Residential Lettings Agents (Arla), said his association had lobbied for rules that required agents to have professional qualifications.
"Solicitors, accountants and doctors must all have qualifications so why not lettings agents? It is not acceptable in the modern world," he said.
Agents held £2.7bn of tenants' and landlords' money in rents and deposits at any one time, he said. This money, Arla argues, should be protected under a compulsory scheme but, at present, Arla members and members of other trade bodies are signed up to such protection on a voluntary basis, for which they pay a levy.
The government is not planning to introduce such a scheme, which would see money refunded to customers were an agent to go bust or fail to pass on payments.
However, discussions with professional and consumer groups lobbying for its introduction are expected to start in a few weeks.