Ministers are being urged to make Client Money Protection a legal requirement for all letting agents.
SAFEagent is calling on the Government to include the requirement within the Consumer Rights Bill, currently going through the Lords.
John Midgley, chairman of SAFEagent, has written to Brandon Lewis, the housing minister, saying there is the opportunity to introduce an amendment into the Bill.
In his letter, Midgley says: “Currently, if an agent misappropriates clients’ funds or uses them fraudulently, there is no recompense if the agent is not covered by a CMP scheme.
“We understand the argument that suggests that Tenancy Deposit Protection offers reimbursement for tenants if anything should happen to their deposit, but in our experience any agent who is fraudulently using other people’s money to trade or for their own use rarely registers deposits and therefore consumers lose out.”
The SAFEagent campaign was established in 2011 and now has over 3,000 offices registered.
It was set up by agents to raise consumer awareness of the importance of checking that an agent is part of a recognised CMP scheme.
Not only are all agents bearing the SAFEagent logo part of CMP schemes, they are also part of recognised organisations offering additional consumer protection.
Midgley said: “It does not make sense that agents who handle clients’ money on a daily basis do not even have to operate a designated client account or can disappear with the contents of that account with no recompense for the consumer, unless they are part of a CMP Scheme.
“We understand and support Government’s action on transparency of letting agents’ fees, but it seems incongruous that there should be the narrow focus on this financial aspect of entering into a tenancy but no regard for whether agents have financial protection if something goes wrong.”
All SAFEagent members are being to write to their local MPs to ensure this issue moves up the political agenda.