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Dlighted chief accuses Mydeposits boss of "bully tactics"

A prominent lettings industry campaigner says the head of a tenancy deposit scheme has “serious questions to answer” after his comments on renting reform.

Mydeposits chief executive Eddie Hooker last month issued a 14-page report arguing in favour of the long-established tenancy deposit schemes and doubting the effectiveness of ‘deposit alternatives’ put forward by some in the industry. 

Now Ajay Jagota, founder of deposit-free renting product Dlighted, has fought back with a stark criticism of Hooker’s document and arguments, contained in an open letter released to the media over the weekend. 

He describes the report as an example of “big business bully tactics” using people’s fears to stifle innovation in the lettings sector - and claims it was written because Hooker was worried about losing customers for the traditional deposit services.

“Deposit free renting is an idea whose time has arrived, and that’s because we have compellingly made a case that it makes it easier for landlords and agents to find and keep tenants, lowers the cost of renting, offers better asset protection to investors and stops millions of pounds being stolen – not through ranting and raving” says Jagota.

Jagota also set out 14 questions that he wants Hooker to answer; several are a defence of his Dlighted service which he says that - contrary to apparent suggestions in the Mydeposits document - does not charge for making claims and is FCA regulated.

He then asks specific broader questions about the deposit sector within the UK’s lettings industry, including: 

How about the £1.4 billion of deposits you and your fellow TDS schemes won’t disclose under our Freedom Of information request as to the location of due to “commercial sensitivity”. Are you finally going to tell everyone where they are? Or do you not know?

You mention that tenants get their deposits back are better off – but have you considered how with inflation currently close to three per cent the deposit they get back it worth less than the deposit they initially handed over? Not to mention any loss of income now there is talk of increasing interest rates;

You claim your key performance indicators are "robustly monitored” – so how does so much money end up being stolen from tenancy deposit schemes? And what happens to companies where this occurs? Are they forced to undergo training? Subjected to additional scrutiny? Fined? Does anything happen?

I share your concern about operators who “bring the whole private rental sector” into disrepute. Are you not worried that by being at the centre of a system where at least £1m of deposits are stolen every single year you yourself could be accused of that?

You imply that insurance companies cannot be trusted as they only care about “the value of the claim rather than who should be entitled to the award”. You are of course the CEO of an insurance company. Do Hamilton Fraser only care about the value of the claim rather than who should be entitled to the award?

  • Paul Smithson

    How bizzare just the first question ? Where's the money held?? mydeposits do not hold the deposits it's an insured based scheme !

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    We had requested under the FOI a list of the organisations who hold these deposits after cases reported in the media highlighted that some organisations in administration, disolved or disappeared that the deposit monies they held had disappeared.

    Quoting from the 14-page report "It is true that tenancy deposit protection schemes are not regulated by the FCA (as they do not sell insurance)"

     
  • Kristjan Byfield

    There is still a gaping hole in the c,aims of deposit alternatives- the claim that tenants costs are reduced. This is simply not true as the replacements are a cost- the deposit is a bond. If the property is suitably returned, deposits get returned in full. Whilst a few agents & Landlords are exploring this new alternative many share Eddie's view that the traditional system (handled legitimately) is still the best system for all concerned. With banks having paid no interest for years- what relevance is inflation or, for that matter, any future ineterst as one of Mr Jagota's key 'pitches' is to free this substantial cash up to be applied to the UK economy- this simply means being spent- if a Tenant soends that money they wont earn any interest on it and will have no cash set aside for a rainy day.
    Whilst, in my mind, there is no doubt business for this new alternative- it is just that, an aternative and will not become a mainstream solution for several years to come- if it achieves this at all. What then happens when these schemes go bust during this time- especially some of the more recent arrivals such as Reposit & Flatflair which claim not to be an nsurance product and are therefore not FCA registered or compliant nor are they underwritten. There are a lot of very valid concerns that make this far from the cake-walk Ajay thinks.

  • Paul Smithson

    Wrong again Mydeposits (Hamilton Fraser) is an insurance company and therefore regulated by FCA

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