Fresh calls for letting agents to offer Client Money Protection have been backed by the Property Ombudsman (TPO) scheme in the wake of several high-profile cases where landlords have lost thousands of pounds in rental income by dealing with an agent that did not have sufficient cover to protect consumers from rental fraud.
TPO’s support for Client Money Protection (CMP) comes almost a year since the cover became available to the whole of the lettings industry through trade bodies and insurance brokers.
TPO provides a free and impartial dispute resolution service for consumers. The scheme operates a one-off membership fee for agents and does not charge any case fees to ensure every registered agent is able to refer complaints to the Ombudsman if they cannot reach a resolution with the consumer directly. With more than 11,000 lettings agents already voluntarily following TPO’s Code of Practice, the scheme represents more than 60% of the industry.
Gerry Fitzjohn, chief operating officer of TPO, said: “As the UK’s largest property redress scheme, it’s truly upsetting to hear of cases where landlords have lost thousands of pounds in rent paid to an agent that has been used unlawfully and cannot be recovered because the agent did not have CMP cover in place.
“Rather than choose to use an agent that charges the lowest fee, landlords must ask if the agent has a CMP policy in place to protect their rental income.
“Within the industry, thousands of agents are already CMP protected but there are still a number of firms that are unaware of the scale of protection it offers. A TPO survey even revealed that some agents wrongly thought CMP duplicated the deposit protection schemes when that simply isn’t the case.
“With more people renting now than ever before, landlords and agents need to understand that CMP provides the guaranteed assurance that the rent collected by CMP protected agents is covered against fraud and unlawful use. TPO wholeheartedly supports CMP cover – the more the industry speaks out about this issue to raise awareness the better.”
More than £23 billion is paid annually in rent, of which £6 – £10 billion is collected by agents on behalf of landlords. With 80% of TPO’s letting agents understood to have CMP cover through their trade body or an independent insurance broker, landlords are being urged to ask their letting agent if has CMP cover to protect the landlord’s rental income.