Alternative Rent Deposit Scheme Scam?

mcmalins

Agent just told my daughter that unless she puts her deposit in their alternative scheme she won't get the flat.  
Their "alternative" is £950 instead of the £1100 in the normal protected deposit scheme but she'll never get the money back.
Was already preselected on forms sent to her.
Sounds like ppi all over again.
Not clear who I can report these people to.

RHemmings

Is there a name for this alternative scheme? And, a name for the agent would be interesting. Is it a large well known chain? 

'No Deposit' schemes are not good, but they are usually significantly cheaper than this. 

Something looks wrong to me. 

propertyrental

is it a scheme like this?

https://blog.goodlord.co/how-do-deposit-replacement-schemes-work

As RH says, the potential benefit is that they are cheaper for the tenant upfront (less cash to find) though the fee is no refundable.

If the cost is similar to what the deposit would be I see no benefit!

RHemmings

propertyrental said:

is it a scheme like this?

https://blog.goodlord.co/how-do-deposit-replacement-schemes-work

As RH says, the potential benefit is that they are cheaper for the tenant upfront (less cash to find) though the fee is no refundable.

If the cost is similar to what the deposit would be I see no benefit!

I don't approve of these schemes. Hence I don't want to say that there is a benefit. The zero deposit schemes that I'm familiar with may be cheaper upfront for the tenant, but otherwise they are terrible. Basically another way of taking the money of people who are already poor. 

For the OP, I'm concerned that they may be getting the worst of both worlds. A high sum, but no actual benefit from that sum. I could easily be wrong, but that's why I asked about the agent and the scheme. So that googling can proceed. 

edgex

Makes no sense.


If the deposit money goes into a scheme, then its being held somewhere so that it can be given back.

If it's not being given back, then it must be coming off the rent, & therefore won't go into any scheme.

Or are they introducing a new charge/fee?



Words have preexisting meanings!

saajan_12

mcmalins said:

Agent just told my daughter that unless she puts her deposit in their alternative scheme she won't get the flat.  
Their "alternative" is £950 instead of the £1100 in the normal protected deposit scheme but she'll never get the money back.
Was already preselected on forms sent to her.
Sounds like ppi all over again.
Not clear who I can report these people to.

These "no deposit" options are effectively non refundable fees.. you know, the thing that was banned in 2019. 
This fee is only allowed if the tenant is free to choose whether to pay a traditional refundable deposit capped at 5 weeks, or the no deposit option.

So I suggest subtly trying to get the agent to put it in writing that the alternative is the only option.