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Client Money Protection Ignored by Trading Standards

Cambridge letting agents who have failed to comply with Client Money Protection requirements are being ignored by cash-strapped Trading Standards departments. This is a nationwide problem according to a report by Property Eye.

Under the Consumer Rights Act, all letting agents in England are now required to display a list of all fees charged to landlords and tenants on their websites and prominently in their offices. These letting agent fees must be shown inclusive of VAT.

In addition, from May 27, all letting agents are also required to display which Client Money Protection scheme they belong to.

Compliance within the industry appears very to be very low despite a potential £5,000 fine. There are no official take up figures available, and it would seem that the rate of policing by Trading Standards could be even lower.

Property Eye have seen a letter sent by the Trading Standards Institute in response to a complaint by a letting agent who is complying with Client Money Protection and advertising of agency fees regulations. He wanted to know why a non-compliant competitor was not being pursued for breach of the legislation.

The response from Trading Standards was as follows:

As you may know, the rules provide for the issuing of a fixed penalty notice for failure to comply with the rule,s provided intention to issue a notice has been issued.

“However, please be aware that councils have received no extra resources to carry out these extra duties. In addition, as with any new regulatory legislation that is not safety related, the general expectation by government and business affected is for a ‘lighter touch’ on enforcement to be adopted in the early days.

“Nevertheless I share and appreciate your frustrations regarding a level playing field and I can assure you that the new rules are something we are actively engaged with.”

The law states that the penalty fine of £5,000 should be regarded as a minimum. Trading standards are able to impose unlimited further penalties if a letting agent continues to break the legislation.

According to Property Eye, some well-known letting agents show tenancy fees on their websites but not landlord fees, and a number say nothing about redress schemes and Client Money Protection. Some letting agents show their fees as + VAT while the legislation requires them to show fees inclusive of VAT.

Letting industry consultant Michael Day, of Integra, said: “I think it would be harder to find examples of compliance than non-compliance. I have no statistics, but I doubt if 5% of the industry has yet fully complied.”

Victor Jameson of Cambridge letting agents New View Residential commented: “The recent step to clarify letting agent fees has been somewhat helpful for consumers. More helpful still is the requirement to belong to a redress scheme, such as the Property Ombudsman. We are members of the Property Ombudsman (http://www.tpos.co.uk/) and ARLA (https://www.arla.co.uk/), both of whom require us to provide Client Money Protection.

“It is a shame that Trading Standards do not have the resources to enforce this important piece of consumer protection. The industry and public seem to be in agreement that Client Money Protection and other letting agent regulation is sorely needed in order to weed out rogue agents.”

Original Article: http://www.propertyindustryeye.com/cash-starved-trading-standards-may-not-rush-to-police-new-letting-agents-law/

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