Steve Harriott of the Tenancy Deposit Scheme has spoken out over a lack of transparency over deposit replacement products.
There are concerns that ‘deposit-free’ renting is mis-sold to tenants unaware of the costs involved.
The scheme gives renters the option of paying a smaller, generally non-refundable fee instead of a traditional deposit – but there have been complaints that people have been misled.
Harriott: “We recognise that tenants should always be offered a choice between a normal cash deposit and a deposit replacement product. The law is clear: no tenant should be ‘forced’ to take a deposit replacement product for a fee.
“We’re also clear that tenants must not be mis-sold these products. Tenants need to know that they remain 100% liable for rent arrears or any damage they cause with these types of new products. The policies they buy do not take away these liabilities.
“We also consider that tenants should be able to challenge for free any proposed charges to them: as they can with the statutory cash deposit schemes. Some of these schemes charge a fee to raise a dispute: we think this is unacceptable.
“We also want to ensure that all of these providers should be regulated by the Financial Conduct Authority (FCA) to ensure that any ‘dodgy dealing’ is stamped out.
“TDS does work with Zero Deposit: an FCA-regulated provider with a strong executive and board stance against mis-selling and where there is no charge to tenants to raise a dispute against a charge.”