Rogue letting agents have reportedly been convicted of stealing more than £750,000 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 several letting agents guilty of illegally pocketing renter’s deposits in 2018 so far, including this month’s conviction of Clifford Wheatcroft, formerly of letting agents Real Est8 Property Solutions of Bournemouth, who was given 250 hours of community service for using £357,260 of tenant’s money to prop up his business instead of placing it in a deposit protection scheme.
Jagota, who wants to see more landlords and tenants to use his company’s deposit-free renting service, claims that hundreds of renters have been ripped off, 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: “Cases of deposit theft are becoming increasingly common and in my opinion will increase even more dramatically once the tenant fee ban is in place.
“A lot of the attention in this case has about how the stolen deposits were used to fund shopping trips and holidays, but for me a much more telling factor is the convicted agent’s admission that he started using deposits to keep up other payments when his business ran into difficulties.
“As we have seen in many case after case the temptation is too great for agents to utilise tenants deposits to prop up failing businesses. It’s common knowledge that the fee ban could cost agents between 20-30% of their revenue, evaporating their profit margin and increasing the temptation to misuse cash deposits.
“It is my honest belief that this behavior is absolutely endemic in our industry, and that our outdated tenancy deposit system doesn’t just fail to meaningfully protect landlords against unpaid rent and property damage, it creates a temptation for theft which for some is too great to resist.”