Warning to agents over using 'unauthorised' deposit scheme

The emergence of an organisation, MTD Secure Ltd, which appears to present itself as running a bona fide authorised tenancy deposit scheme, has led to an urgent warning.

The scheme is called mytenancydeposit.co.uk, which has a website headed ‘straightforward deposit protection’. It says: “Our deposit protection is a custodial scheme.  All deposits protected by us are held in our ring fenced Client Deposit Account in accordance with Client Money Regulations.

“We provide deposit protection to all landlords, letting and managing agents regardless of whether you are affiliated or registered with a professional body.”

It also claims to pay referral fees, telling agents: “We generate revenue from our website advertising and as a result of which we are able to pay agents a £10 referral fee for each deposit protected.

“National statistics show that the average Letting Agency currently lets 7 properties per week and with this in mind, your agency could be earning an extra £3,640 per annum.”

Although claiming to be a custodial scheme – where the tenancy deposit money is physically handed over – in its ‘scheme rules’, mytenancydeposit claims to be linked with an insurance-backed deposit scheme.

It says: “mytenancydeposit administers a Tenancy Deposit Protection Scheme operated by Tenancy Deposit Solutions Limited appointed by Communities and Local Government.”

Tenancy Deposit Solutions runs an authorised scheme, mydeposits, which categorically denies any association.

In a statement, mydeposits said of its supposed associate: “This company does NOT operate a Government-authorised scheme for the protection of tenants’ deposits within England and Wales. There are the only three schemes where landlords and letting agents can legally protect their tenants’ deposits.”

The three official schemes are:
* Tenancy Deposit Solutions Limited trading as mydeposits.co.uk
* The Dispute Service (thedisputeservice.co.uk)
* The Deposit Protection Service (depositprotection.com)

Of these three, the Deposit Protection Service is the only approved custodial scheme.

The mydeposits statement went on: “The claim that MTD Secure Limited is a company administering a tenancy deposit protection scheme by Tenancy Deposit Solutions Limited under contract from Communities & Local Government is not true.

“Any letting agent and/or landlord using this company should be aware that their deposits will NOT be protected. You should immediately use one of the three authorised schemes to comply with the law. Not protecting deposits with one of the three Government-authorised Schemes can lead to penalties for the landlord.

“If you have already deposited funds with this company, you should seek legal advice immediately.”

It is understood that CLG has been informed and that its lawyers are investigating.

When Estate Agent Today called Mytenancydeposit, which is based in Birmingham, for further information, we asked if it operated a government-approved scheme. We were told by someone who said he worked in sales that it passed business on to mydeposits.

Told we were making a press inquiry, he said a director would contact us but this has not yet happened.

Mydeposits said it had no arrangements with a third party to pass on business, and nor would it. Neither would it ever pay agents referral fees.