Letting agent scam may hand Scottish tenants millions

THOUSANDS of Scots are owed more than £12.5 million as part of an illegal letting fees scandal that could trigger an avalanche of PPI-style payouts, it has emerged.

Almost 700,000 people living in rented accommodation are now being urged to claim back any cash they have “unlawfully” paid to letting agencies over the past five years.

The rush for compensation, triggered by a recent Scottish Government “clarification” of an existing law, could potentially see dozens of letting agencies go bust. (from the Scottish Express)

Illegal (and therefore recoverable) charges include any money paid to a landlord or letting agent except for rent and a deposit. This includes all other charges, whether they are called payments for referencing, credit check, administrative, guarantor, lease drafting, or by any other name.

There is a simple procedure to follow to reclaim fees, which involves making a report to your local Police who will investigate.

Mr MacRae of Shelter Scotland said “Some letting agents have been trying to attract custom from landlords by cutting their fees and moving the charges on to tenants. In some circumstances, they have been charging both tenants and landlords.

“We’ve done our part and there is no reason that these unlawful acts should be ignored any longer. Those ripping off tenants should be driven out.

“Realistically, I expect that where letting agencies have been set up on a business model to flout the law – and that law is now enforced – that business will no longer work. There is every likelihood that those who don’t adapt will go out of business.” (source)

 

We previously covered the landmark Court ruling in Aberdeen confirming that fees charged before the Scottish Government clarified the law in 2012 are also illegal.

According to the Govan Law Centre, Scots may have paid around £2 million per year in illegal charges. It is quite likely that letting agencies will not have sufficient cash on hand to pay all claims, and many are expected to go bust. Tenants are urged to act now to reclaim their money as payments are likely to be made on a first come, first served basis.

The Campaign to Prosecute Landlord Fee Fraud is in discussions with prosecutors to learn whether this widespread incidence of white collar crime will result in prosecutions and confiscation of assets derived from these crimes.

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