"This is just the tip of the iceberg and this is not just about a handful of criminals"
2017’s first example occurred this week when Julie Feilden admitted 13 counts of theft by employee at South East Suffolk Magistrates having embezzled close to £16,000 from her former employer, the Newmarket branch of Smith Gore.
As lettings administrator, Feilden was responsible for collecting deposits from a number of tenants and placing them in a tenant deposit scheme, but stole various amounts - ranging from £450 to £3012 – between March 2010 and September 2015.
The business - subsequently acquired by Savills – was a member of industry body ARLA and subject to annual auditing.
Research from Jagota last year showed £1,018,100 of deposits were stolen in 2016 - with at least one landlord or letting agent convicted every single month.
Jagota, founder of deposit-free renting solution Dlighted, said: “£2.4bn of the UK’s £3.2bn rental deposits are held by lettings agents, with next-to-no supervision over what happens to that money. It’s far too easy for this money to be used illegally or inappropriately and this is a huge scandal waiting to happen.
The worst part is, this is just the tip of the iceberg and this is not just about a handful of criminals. We’ve even been approached to assist in one major new case which will be coming to light in coming weeks.
Deposit money must be placed in a completely ring-fenced account and not touched by the agent or landlord for any business purpose. But there is a common belief in the industry that to do so it completely legitimate and as a result there are doubtless countless otherwise upstanding and honest agents who misappropriating client money by mistake.
This is a government-backed system which is subject to no scrutiny at all. Not even the media! We’ve had respected and apparently knowledgeable journalists tell us letting agents can use deposits any way they see fit!
This agency was even a member of ARLA and as such would have been audited annually. But these crimes went on for five years and nothing was uncovered. I’ve tweeted them asking for an explanation but so far nothing has been forthcoming. If landlords and letting agents didn’t take cash deposits these crimes wouldn’t be possible. And that’s why the deposit system needs urgent reform”
