We learned in the Sun today that leading UK letting agents, including Foxtons, Your Move, and Countrywide, are making a tidy profit from placing new tenants on a premium energy tariff with provider Spark, and getting away with it by burying the details in the fine print of tenancy agreements. Very often, having moved into their new home, renters would find that after a single month at a reduced introductory rate, they were being charged up to twice as much as the standard by Spark Energy.
Consumer editor Daniel Jones reports that agents stand to make a reward of £25 for each tenant that they manage to hoodwink into these deals, taking advantage of the already-complicated nature of the renting process to fool them into signing up for higher energy bills. Foxtons and friends cover themselves by stating in the contract that tenants are entitled to change providers whenever they wish, but by no means is this made clear. It’s a shady practice, but, sadly, it is legal.
Spark Energy was fined £250,000 by energy watchdog Ofgem, which has been investigating the firm since June 2013, for making it too hard to switch providers. A spokesperson for Ofgem said: “The fact that Spark’s problems occurred when it was establishing itself in the market is no excuse for not complying with its obligations.” Foxtons, Your Move and Countrywide all declined to comment on their deals with the company.
When we founded Rentify, it was with the purpose of disrupting underhand deals like this, which don’t serve either tenants or landlords. We’re not out to make a quick buck; we want landlords and tenants to trust us with all of their property needs in the long term: we believe that trust and transparency between landlords and tenants is key.
Too often, agents seem to confuse and complicate that relationship on purpose. This latest scandal is symptomatic of the many ways in which dinosaur agents try to make a quick buck from tenants; it’s their way of holding onto an increasingly obsolete business model which simply isn’t sustainable in the internet era.
The truth is, your average landlord would be mortified to discover that their tenants were being treated this way. As more and more cases come to light, tolerance for consumer-unfriendly practice is going to evaporate completely, and agents will be punished by their customers, who are already voting with their feet by seeking out new alternatives. Perhaps that’s why Rentify already has 100,000 landlords signed up.
George Spencer is CEO of Rentify.