Property Ombudsman Christopher Hamer is calling for a consumer watchdog to tackle rogue letting agents.

After years of trying to persuade the government to regulate the industry without success, the ombudsman is turning to trade bodies and reputable agents to police their own industry.

Complaints against letting agents tipped 7,640 in 2011 – a rise of 26% – and the ombudsman believes better consumer awareness and an industry that works together to outlaw cowboys is the way to move forward.

“Getting that message across can only be achieved by such bodies pulling together, and bringing in a consumer stakeholder contribution, so that it is made obvious to consumers which firms remain in the minority, intent on operating outside of industry approved standards,” said Hamer.

Many complaints are from landlords and tenants who have lost rents and deposits due to fraud or bad management by letting agents who did not protect client cash.

“I am concerned that many consumers had no alternative than to taking potentially costly legal action to pursue their complaint,” said Hamer.

“Consumer awareness is the key. Knowledgeable landlords already check if an agent has a separate account for client money and has signed up to a redress scheme, before allowing them to market their property.”

In the absence of regulation, the ombudsman proposes an industry council to develop and promote overall standards for letting agents.

“Getting that message across can only be achieved by such bodies pulling together, and bringing in a consumer stakeholder contribution, so that it is made obvious to consumers which firms remain in the minority, intent on operating outside of industry approved standards,” said Hamer.

He points out that laws regulating estate agents were drafted 30 years ago and do not include letting agents. Anyone can start a lettings business without a formal qualification or licence.

Hamer wants the government to amend these laws to cover letting agents.

“The consequences of redefining just one phrase ‘interest in land’ would mean that the obligations would become applicable to every lettings agent, forcing them to join an approved redress scheme and obliging them to act in accordance with a code of practice,” he said.

Download a full copy of the report