Tenancy Deposit Scheme calls for clarity over zero deposits

Added by Love Business East Midlands | 11 February 2020

A leading industry expert has called for transparency over deposit replacement products and is urging for any mis-selling to be stamped out.

It comes after concerns were raised over ‘deposit-free’ renting being 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.

Steve Harriott is the group chief executive of the Tenancy Deposit Scheme (TDS), a not-for-profit, Government-approved tenancy deposit protection scheme.  

He said:

“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 per cent 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.”

TDS is the only not-for-profit tenancy deposit scheme in the UK, which means it continuously invests surpluses into raising industry standards with excellent service levels, quicker call response times, user-friendly technology and faster tenancy dispute resolutions. 

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