Rogue letting agents reportedly have been convicted of stealing more than £1m worth of tenancy deposits so far this year – and one campaigner believes this figure could be the tip of the iceberg.
Analysis from anti-deposit campaigner Ajay Jagota of Dlighted shows courts have found at least 14 letting agents guilty of illegally pocketing renter’s deposits in 2016, with the size of the thefts ranging from £500 to £400,000.
Jagota, who wants to see more landlords and tenants to use his company’s deposit-free renting service, claims that over 1,000 renters have been ripped off to the tune of £1,100, with at least one landlord or letting agent convicted every single month.
Jagota of North East letting agency Keep It Simple and deposit-free renting solution Dlighted said: “If a piece of jewellery or a painting worth £1m was stolen or 1,000 consumers were simultaneously ripped off it would be a major news story. So why should another theft of that scale be tolerated?
“It’s plain and simple: If landlords and letting agents didn’t take cash deposits these thefts would be avoided.
“The most horrifying part is that this is in all probability just the tip if the iceberg. Two thirds of the industry opt for a insurance-based tenancy deposit scheme meaning they are custodians of £2.bn of the £3.5bn held in tenancy deposits.”
All three tenancy deposit schemes operated by MyDeposits, Deposit Protection Service (DPS) and the Tenancy Deposit Scheme (TDS) are clear – deposit money must be placed in a completely ring-fenced account and not touched by the agent or landlord for any business purpose. But Jagota believes that there is a common misconception in the industry that to do so it completely legitimate. “And there are no check and balances stopping them.”
He continued: “Countless agencies could be unwittingly breaking the law, and if some agencies are habitually using deposit money in their day-to-day activities, what happens if they no longer could? They would become insolvent overnight.”