Tenants Are Falling Victim To A New Deposit Fraud

March 25,2022 | The TDC Content Team

Unfortunately for many in the UK, renting is becoming increasingly expensive. Zoopla reports that at the end of 2019, the average cost of rent increased by 2.6% – the highest growth rate in 3 years

Upon applying to rent a house, it is now industry standard for a tenant to be expected to have at least one month’s rent to pay upfront, a deposit and the associated fees for credit checks, etc.  

During this financially stressful time, the last thing a tenant would want is to fall victim to a deposit scam. However, there is a growing online trend of fraudsters claiming to be landlords who are doing just that.

Action Fraud, the national fraud and cyber-crime reporting centre, has warned tenants about fraudsters who are posing as landlords online in order to con people into paying upfront rent in a Tenancy Deposit Scheme. 

The reporting centre says that since December 2019, it has received 28 reports of this fraud, amounting to a total loss of £19,990.


How does Tenancy Deposit Fraud work?

Prior to a potential tenant viewing a property, the fraudsters ask the tenant to pay a deposit and, in some cases, a month’s rent upfront.

They claim that the money will be protected by the Tenancy Deposit Scheme and that the money is safeguarded under government legislation. 

Upon receipt of these funds, the potential tenant will then receive a fake email, claiming to be from the Tenancy Deposit Scheme to confirm that the deposit has been registered with them. 

This, however, is not the case and the victim later discovers that the money has been sent directly to the fraudster who then disappears.

Director of Action Fraud, Pauline Smith, says: 

Devious fraudsters are targeting a whole host of victims, from university students to professionals, for their own selfish gain. 

Falling victim to rental fraud can have a huge impact on your finances at a crucial time where every penny counts. This is why it’s so important to follow our advice to protect yourself.


How can I protect myself and my deposit?

It is not industry standard to be required to pay any fees prior to viewing a property, so if you are ever asked to do so, that should be the first red flag. 

It is good practice to ensure that you or a trustworthy contact of yours has viewed the property with an agent or landlord prior to entering an agreement to rent a property. 

Most agents are well established online or on the high street, so you can often ensure their reliability through online reviews or word of mouth. The surest way to do this, however, is to check that they are members of a government-approved redress scheme. 

Since October 2014, all letting agents are legally required to be a member of one of the two government-approved redress schemes:

  • The Property Ombudsman
  • Property Redress Scheme

Using an agent that is a member of a redress scheme demonstrates that the agent is following the law and provides a third-party outlet for a tenant to complain if you are ever required to do so. 

For private landlords, proving their legitimacy may have usually been a trickier task, however, in 2016, RentProfile was launched by two brothers, motivated by their experience of being victims to fraud. 

RentProfile uses the Land Registry’s online services to look up and validate the property ownership of landlords in England and Wales.

Upon following the above advice and being satisfied with the outcome, it would then be sensible to request copies of the safety certificates and a valid contract. Once content with all the above, you should be in a more comfortable position to transfer funds. It is often recommended to pay these funds by card or bank transfer – not cash – to ensure there is proof of transactions if you ever need to report a complaint in the future. 

Once you have paid your deposit and the agent confirms they have logged it with a deposit protection scheme, you can check so yourself by entering your tenancy deposit certificate code on the relevant tenancy deposit website.


What is a tenancy deposit scheme?

There are three tenancy deposit protection schemes that are protected by law. Each of these schemes have a platform so you can verify if your deposit has been protected. These platforms are:

• Deposit Protection Service

• My Deposits

• Tenancy Deposit Scheme

If you cannot find your deposit in one of these schemes, it is likely it has not been protected. We would advise getting in touch right away.


How can Tenancy Deposit Claims help?

Tenancy Deposit Claims are a group of solicitors who endeavour to protect tenants like you and their legal rights. We have a dedicated team that regularly deal with landlords.

If your landlord hasn’t protected your tenancy deposit, we are committed to securing the best possible outcome for you and we will keep you up to date in relation to your case, every step of the way. 

If you have been told by your landlord that the deposit is protected but it is not in any of these three schemes, you may have a claim for compensation. You may also have a claim if your landlord has simply failed to tell you where the deposit is protected within 30 days. 


How Can We Help

At Tenancy Deposit Claims we make claiming for compensation easy:

  • No Win, No Fee*
  • No Upfront Payments
  • An Expert Team
  • Regulated and Authorised by The Solicitors Regulation Authority

You can get in touch with an expert team today by completing our online enquiry form here. Enter your details and we will be sure to get back in touch with you.

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This means that if we are unable to recover compensation for you, we will not charge you.

If we are successful in recovering your damages, we will charge you 25%+VAT of your damages.

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