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Mandatory membership of a redress scheme came into force on 1 October 2014 requiring that letting agents and property managers join one of three Government-approved redress schemes.
The Property Redress Scheme (PRS) joined the Ombudsman Service: Property and The Property Ombudsman in being authorised by the Government to ensure compliance with this regulation.
The remit of the three schemes is to provide an escalated complaints process to consumers that are members of the individual scheme.
Since October 2014, the PRS has ensured that more than 6,500 agent offices now comply with the law and this number is growing at a rate of more than 30 per week. Over the past two years, the PRS has handled more than 700 formal complaints on behalf of consumers. There are a further 115 live cases currently progressing through the scheme.
Within the powers that a redress scheme possesses is the ability to remove a member when they do not comply with a decision. The legislation also prevents an expelled member joining another redress scheme until the agent complies in full with the decision made by their previous scheme, meaning that they are breaking the law. At that stage Trading Standards are notified to pursue enforcement whether that be by the application of a fine, banning order or criminal prosecution under the Consumer Protection from Unfair Trading Regulations 2008. For the avoidance of doubt, under the current legislation, the three redress schemes have no powers to impose fines or banning orders on their members.
There have been 36 members expelled from the PRS scheme since inception, including the agent Carter Stones. A press release was issued in September 2016 about the expulsion of Carter Stones as members of the PRS for failing to make good awards totalling £15,506 to four complaints. The two other redress scheme providers were notified of this expulsion to prevent Carter Stones from joining their schemes.
The expulsion of Carter Stones meant they were no longer compliant in their duty to belong to a Government-approved redress scheme. Redbridge and Tower Hamlets Trading Standards fined Carter Stones the maximum penalty of £5,000.
The resulting publicity of this particular case has highlighted a gap in the understanding of the role of a redress scheme. Without appropriate enforcement from the local authority, it is not possible to close down those agents who act criminally. The PRS support the Government and introduction of new legislation which allows Trading Standards to issue personal banning orders against individuals.
The PRS works tirelessly to ensure that when a complaint is made against a member agent, it is dealt with thoroughly and fairly to all parties involved and provides effective consumer protection as laid down in its terms of reference. The PRS has invested heavily to produce an online complaint management system to allow the individual consumer to raise a complaint online and to ensure greater transparency through the process.
The PRS website provides a simple to use agent member tracker for consumers to check if their agent is compliant and, for added transparency, all expelled members from the scheme are displayed in the resources section.
The PRS firmly believes that part of its remit is to raise standards and are committed to driving these standards throughout the private rented sector. The PRS has taken the approach that education is a benefit that can be passed on to members and has set up training workshops, issue newsletters and detailed case studies, and offer our best practice and legislative updates as they happen.
The PRS is proud that it has been able to ensure compliance within the lettings industry and assist consumers with an alternative to using the Courts to resolve disputes. The PRS will continue to work closely with the other two schemes in the area of redress and with local authorities who issue and enforce penalties against rogue agents.
The PRS Advisory Council Members:
Lord Monroe Palmer
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Property Redress Scheme is approved by Government under the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015