A recent ruling by TPO concered an applicant who had paid a deposit and reference charges to an
agent, and who had also signed a tenancy agreement, but the landlord hadn't.
The landlord decided that the references were not "good enough" so declined a tenancy and the agent refunded the deposit but not the reference costs. The applicant appealed to TPO and lost! An agent only has to refund reference charges if the landlord pulls out, if references were otherwise satisfactory. The only other situation where reference charges could be retained is the failure to disclose relevant information by the applicant.
The OFT cites in its guidance that it would be 'unfair' not to refund charges otherwise.