London Trading Standards has warned that a new and sophisticated rental deposit scam, with fraudsters stealing thousands of pounds daily from the Capital’s tenants by using real protected deposit certificates to make bogus properties appear legitimate.

It says scammers are exploiting the highly competitive rental market by pressuring people to pay holding deposits, security deposits and sometimes rental payments up front before they have even viewed a property.

They then provide deposit protection certificates gained legitimately via membership of an official deposit scheme to convince victims the transaction is genuine, despite having no intention of returning the deposit.

When victims realise the cut-price properties they wanted to move into do not exist and try to claim their deposits back, they discover the certificate was ‘protected in contravention of the scheme’s rules’ as there was never any intention to give the tenant their deposit back.

Phonelines disconnected

When victims then call phone numbers provided by the fraudulent companies, they discover the lines have been disconnected by the National Fraud Agency.

More than 50 people have tried to claim their deposits back in this latest scam wave, with one tenancy deposit company receiving 52 calls related to the fraud and warns more victims may be yet to realise they have been duped.

According to Government data, it is 18 to 39-year-olds who are most at risk of these kinds of scams, accounting for almost three-quarters of rental fraud cases with losses amounting to nearly £9 million for around 5,000 reported cases last year.

To protect tenants, London Trading Standards is emphasising the importance of using reputable agents registered with government-approved redress schemes.

Tenants should use a reputable agent and ensure that the one they are using is registered with a Government-approved redress scheme.”

A Trading Standards spokesperson said tenants should never hand over money until they have viewed properties and payments should always be made by bank transfer.

“When using a letting agent, tenants should use a reputable one and ensure that the agent they are using is registered with a Government-approved redress scheme as well as a client money protection scheme.”

London Trading Standards is urging anyone with information about scam tenancies to report it via its consumer crime reporting page.