Conservative MP Oliver Colvile is calling for urgent action following a recent spate of fraud involving rogue letting agents.
When approached by BBC South West, investigating allegations against a Cornish letting agency said to owe over £35,000 to clients, Colvile said: "I think this is appalling and clearly there needs some action to be taken on all of this."
The BBC says Premier Property Management, based in Truro, Cornwall, owes more than £35,000 to tenants and landlords and is run by Ann Treneer from Newquay.
When approached by a BBC journalist on camera, Treneer declined to comment; however, she later told the corporation that the money was safe in a ring-fenced account from which she claims she will refund her clients. However, up to the BBC South West programme’s transmission earlier this week, no money had been returned.
Treener is now reported to be under investigation by Cornwall Trading Standards, but the case has now been highlighted by campaigning letting agent Ajay Jagota.
"An average small independent agent would probably be managing about 200 properties which would equate to £300,000 in tenancy deposits. We think this is the sector's dirty little secret where they can dip into this account when they see fit" says Jagota.
He adds that there is no need to take cash deposits and properties should instead be insured against careless tenants.