The closure of yet another letting agent – with yet more customers left owed their deposits – led a leading property campaigner to compare renting in the UK to “a protection racket where paying the right organisations lets you pretty much do as you please”.
In January 2017 Morgan Hampton of Wimborne in Dorset became the latest letting agents to shut up shop leaving behind a queue of customers claiming deposits have gone missing.
Dorset Trading Standards confirmed that they are investing the firm and have been quoted confirming that: “The main allegations involve the theft of customers’ deposits.”
The company appeared to be a member of a compulsory tenancy dispute service, and the firm’s tenancy protection scheme DPS has declined to answer a number of questions put to them by deposit reform campaigner Ajay Jagota.
A source close to the case alleged that “if this is a case of fraud, we have no idea what the scale of that fraud is. This is just the tip of the iceberg.
The source continued: “Deposit money is just sat there. If someone is going to act fraudulently, then it is really easy to do that.”
Property campaigner Jagota, founder of Dlighted the deposit replacement scheme which offers landlords a rent guarantee, £500,000 of asset protection and free legal support, while eliminating the need for a tenancy dispute service, submitted a number of questions to ARLA, DPS and affected companies in an attempt to establish what has happened.
All those contacted have declined to answer.
“Renting in the UK is starting to feel like a protection racket where paying the right organisations lets you pretty much do as you please.
“We’ve been trying to get to the bottom of what has happened in this and several other cases, where tenancy deposit schemes, redress schemes, industry bodies like ARLA the firms involved have been members of have been fundamentally unable to prevent serious wrongdoing and are now unwilling to answer our questions.
“It shouldn’t be left to us to do that. I believe in self-regulation, but this is ridiculous!
“This is the sector’s dirty little secret which we are exposing and either government is aware and complicit or not aware and incompetent, there can be no excuse not to act and reform cash tenancy deposits.
“£2.4bn of deposits are currently held by letting agents in insurance tenancy deposit schemes. As our whistleblower says, if people want to act fraudulently it is really easy to do that. The entire system is in urgent need of reform”