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12th Nov 2018
The working group set up by the Department of Communities and Local Government to consider Client Money Protection rules, has suggested the scheme should made compulsory for all letting agents that handle client money.
The housing minister Gaving Barwell has subsequently accepted the findings, and a formal government announcement is expected today.
The working group was put together last August with the remit to decide on whether it would be appropriate to recommend making client money protection mandatory (CMP) on letting agents in England.
After gathering evidence on the matter and a consultation period, the working group suggested that 85% of interested bodies, including letting agents, were keen to see mandatory CMP.
A statement released from the group said: "This would improve the reputation and professional standards in the industry as well as giving consumers the financial protection that they want and deserve. It would also bring the sector into line with others where client money is held, for example the legal profession and travel operators."
The group went on to say: "It is presumed that it is those agents that dot not have CMP voluntarily that are more likely to abscond with or abuse client money in their custody. Mandatory membership of a CMP scheme would help to drive up standards across the sector."
The group also suggested those existing agents which fail the due diligence requirement to access CMP cover should not be able to continue to handle client money.
Furthermore, to give agents time to adjust, the group recommends a transitional implementation and those seeking to obtain CMP cover should not be required to join a professional body.
12th Nov 2018
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