Tenants are being cheated of their right to have their deposits kept safe from unscrupulous landlords, housing charity Shelter has revealed.
One in ten tenants is being misled while a third of renters aren’t aware they can have their money protected.
Landlords are required by law to put deposits into one of three Government-backed schemes within 30 days of receipt.
Those who fail to do so can be taken to court and face a penalty of one to three times the value of the deposit, which is then awarded to the tenant.
Under new rules, a tenant’s deposit money can only be taken for genuine reasons — for example, if the property has been badly damaged by the tenant, or if rent is underpaid at the end of the tenancy.
But some landlords are grabbing chunks of cash for the flimsiest of reasons or making renters wait months to get the money back, Shelter found.
Shelter said many tenants had been forced into high interest payday loans to cover bills while they waited to get their deposits back.
Campbell Robb, chief executive of Shelter, said: “We campaigned for this change in the law to stop renters from losing money in unfair deposit deductions, so it’s extremely worrying that so many are still unaware of their tenancy deposit rights.
“We know that most landlords do the right thing but unfortunately some are still unaware of their responsibilities to protect the deposits that are given to them in good faith.
“At Shelter we hear from thousands of renters who have huge chunks deducted from their deposit for no good reason, or who have to wait months to get their money back.”