A BBC investigation has claimed that 14 agents across the UK were convicted of stealing over £1m of tenant deposits last year including £400,000 taken in the East Midlands and £220,000 in Hertfordshire.
The investigation, which was broadcast last night, places the blame for the high value of stolen deposits during 2016 on the insurance-based versions of the three deposit protection schemes, which enable agents to keep tenants’ deposit without having to lodge deposits with a scheme.
The programme includes an interview with tenants’ rights campaigner and Conservative MP for Plymouth, Sutton and Devonport, Oliver Colville (pictured, left), who said the situation “is appalling and that there needs to be some action taken and some fines placed on people if they misappropriate those funds”.
The BBC TV report also interviewed North-East based letting agent Ajay Jagota of KIS Group (pictured, below), who as well as running a four-branch agency in the North East, has launched his own insurance-industry backed alternative to the official deposit protection schemes, and in the programme calls the problem of stolen deposits the industry’s ‘dirty little secret’.
The three government-sanctioned deposit protection schemes, on the other hand, say that cash-based deposits remain popular and, in a recent joint statement to The Negotiator, said: “An overwhelming number of landlords in the UK continue to choose to take a deposits from their tenants; for security, a level of protection for their property investment and to encourage tenants to abide by the terms of the Tenancy Agreement,” it said.
“[Our] tenancy deposit schemes are in place to ensure that the landlords who take deposits can protect them in line with their legal obligations.”
The BBC report, which appeared on its Inside Out South West report presented by Jemma Woodman, also featured a Truro agent who the BBC alleges has failed to pay back £35,000 in deposits to tenants and landlord despite a Property Ombudsman decision against her.