Time for all to come clean over CMP, says SAFEagent
The membership bodies and their Client Money Protection insurers have been told that they must come clean about their policies and what they cover.
Nicholas Cooper, managing director of Northwood and chair of the SAFEagent scheme, delivered the call in a hard-hitting speech at the NALS conference in which he also revealed the scheme’s immediate objectives.
One is to ‘do more to tighten the noose around rogue operators’. An information network is to be established with the aim of cascading information about rogue agents between industry organisations, with a hotline to Trading Standards being simultaneously set up.
A second objective is to build SAFEagent’s membership from 2,000 to 5,000 by the end of next year.
Currently, Cooper said, the whole issue of CMP was shrouded in secrecy.
He said that there were only two insurers in the CMP insurance market, both offering similar policies, but both were reluctant to publish any data as to the level of payouts.
And he criticised them for failing to provide any coverage at the exact point it was needed, once an agent stopped belonging to any of the organisations – citing both ARLA and NALS.
He also criticised the membership organisations – ARLA, NALS, RICS and the Law Society – for hiding away CMP on their websites, and for failing to spell out what the policies covered and how they worked.
He said that visitors to the ARLA website had to scroll some way down before finding anything about CMP, and that it was nowhere to be found on the RICS website.
“If we struggle to find it, then what hope does a landlord or tenant have?” he said. “Lack of consumer awareness is the real problem.”
He said that SAFEagent was born out of agents’ frustration that CMP was not being properly promoted by any of the bodies, even though it was meant to be a membership benefit.
Cooper said: “Meanwhile, firms continue to go bust – and that is bad news for the whole industry.”
He also said that membership of an organisation did not deter agents from unethical practice.
Cooper said: “We have all been offered for sale firms with holes in their accounts, and irregularities over client money, even though they are members of an approved scheme.”
He said that there were some sales to other companies which ‘smell’. He said that in some cases, the buyer acted like some kind of white knight, helping customers of the previous agent claim against a tenancy deposit scheme. In fact, he said, this was no more than an ‘insurance scam’.
“Then there are liquidations, whereby agents place adverts in the London Gazette, supposedly to inform their creditors. But who has the time and inclination to trawl through the London Gazette?”
Cooper said the agent then winds up and sheds all their debts, before getting back into business with an almost identical name.
He said he had known firms do this more than once.
In other parts of his speech, Cooper said that SAFEagent was not a trade body and did not compete with them. He did, however, call on them to give ‘more support than they already do’.
He also said that he did not believe licensing was the answer: “What we need is proper enforcement of existing law and more prosecutions, not more red tape.
“I believe CMP should be compulsory for all agents, as should membership of an ombudsman scheme.”
At the SAFEagent forum next month, all the membership bodies, tenancy deposit schemes and insurers will be invited to spell out their policies as well as share other information.
Article courtesy of LettingAgentToday
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