Consumer champion urges crackdown on rogue letting agents

Rogue letting agents that swindle landlords and tenants out of hundreds of thousands of pounds a year have come under fire from the renting industry’s consumer champion.

Property Ombudsman Christopher Hamer is urging the government to clean up the industry by providing more financial and legal safeguards for landlords and tenants.

His appeal follows a surge in complaints with the ombudsman dealing with 1,338 cases, the highest recorded in 20 years since the scheme started.

Around 670 of the complaints related to letting agents.

The problem highlighted by the ombudsman is although the ombudsman’s scheme has 8,008 member firms operating 7,851 lettings offices, anyone can set up as a letting agent.

Most letting agents voluntarily register with independent schemes, like the ombudsman, that impose a code of practice and complaints procedures – but many do not bother.

“Many agents conduct their business by following our code of practice, but there are still too many who are operating without that commitment to standards and without any external controls over what they do with client money,” said Hamer.

Government snubs call to clean up letting industry

“The code represents a comprehensive set of standards by which firms conduct their business.

“Knowing a firm is complying with those standards will give consumers confidence that they are dealing with an organisation which has a committed approach to customer service and that best practice is being treated as a priority by agents.”

Regulating letting agents is a key issue within the industry.

A breakaway group of leading letting agents with hundreds of offices across the country has formed a kite mark scheme to differentiate their businesses from other agents. Several other bodies like the Association of Residential Letting Agents (ARLA) operate money protection schemes as well.

Nevertheless, landlords and tenants are still losing cash to unscrupulous agents.

Hamer’s battle to regulate the industry has received snubs from Housing Minister Grant Shapps, who has also publicly stated the government will not act to tighten up the industry. The Office of Fair Trading (OFT) has also failed to act on his recommendations.

“I had hoped to gain accreditation from the OFT to further strengthen consumer confidence in the code but I am disappointed that having submitted it to the OFT some three years ago I remain unclear as to when that endorsement will be given,” said Hamer.

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