Major argument with DPS how do I resolve it?

[gnawood]

The problem. [details changed to protect the innocent]

According to the DPS computer, I have tenant A with a £500 confirmed deposit when he should have £250, and tenant B with no confirmed deposit when he should have £500.

DPS has not fixed this, so tenant A is a happy bunny and I am at risk if tenant B turns nasty about his deposit.

How it happened.

1. Two tenants A & B each committed for a deposit of 500. Tenant A paid an initial 250 towards his deposit of 500 and tenant B paid the full 500.

2. In the DPS system I created a deposit named A for £500 and a deposit named B for £500 [note the time sequence; A then B]

3. Next day I remitted 500 from my bank with the reference B and a few minutes later remitted 250 with the reference A. [Note the time sequence; B then A]

4. The DPS computer ignored my bank references and auto-allocated the first payment [500 sent with reference B] to the first deposit [A] and notified tenant A he has 500 protected.

5. The DPS computer put the second payment [250 sent with reference A] into my DPS account awaiting allocation instructions.

I protested to DPS and after multiple email exchanges over the past two months have established;

* The DPS computer ignores ALL reference details that accompany a bank transfer.

* If multiple deposits are open, a received amount is allocated to the earliest deposit with the same value.

DPS says

* its my fault because I failed to sent payments in the same order as I created the deposits.

* having explained the situation as above, DPS consider the matter closed and do not intend to correspond with me further regarding this particular issue.

* the only way to get back their 250 overpayment to tenant A is to use the deposit repayment procedure which requires tenant A to agree.

I say

* DPS should not ignore the reference detail accompanying a transfer as this is unprofessional and does not match the performance standards expected from a serious financial institution.

* I submitted the 500 deposit for tenant B in good faith and with a clear reference, so they should credit his a/c, and tell him his deposit is protected, and protect me if tenant B turns nasty about his deposit.

Questions;

What should I do now?

Is there an ombudsman with jurisdiction to resolve the dispute?

Thanks for bearing with my problem.

GnA.

[Mortitia]

There is a DPS ombudsman scheme - it is time consuming. The simplest thing to do would be to explain to tenants A and B what has happened, refund deposit temporarily and re-submit in the correct manner.

I use the DPS solely as deposit holder. They have a set of rules and NOTHING will get them to alter their stance I have found.

I always send cheques rather than bank transfer - that way there is more of a paper trail should a problem occur.

You may think them unprofessional or not up to the standard you would like but the service is free (custodial scheme) and easy to use and that appeals to many.

[Grampa]

I protect 95% of my deposits with the Dispute service and only use the DPS for a few properties so am not over ally familiar with the procedures but my thoughts are:

1 The DPS have a procedure in place to correct errors with deposit all ready protected.

2 The DPS must have an internal complaints procedure which they must give you if you ask and a further option such as the ombudsman if it doesn't resolve the issue.

3 You must have a written record of the correspondence stating what deposit is allocated to which tenant.

4 Write a letter for tenant A to sign stating they agree that their deposit is only £250. If they don't sign threaten to give notice then do it if they don't.

5 You are responsible for returning the deposit paid to tenant B (less W&T etc)

6 Tenant B would have to take you to court to get the outstanding £250 returned if you only return £250.

7 There is a possible issue of non-compliance with the deposit for Tenant B as they paid £500 but only £250 protected. This may leave you liable.

I would advise you to get tough with Tenant A and go round to see him with a written letter to sign agreeing to the correct deposit and a section 21 and tell him it is one or the other. If wont comply serve the s21.

I have had to deal with a similar issue last week. We full manage a property that we took on from another agent with the tenant in situe and the deposit in the DPS but when it came due to renew the tenancy I was suppressed to find the tenant listed with the DPS was another person and with no connection to the tenants or landlord. The previous agent cocked up and have since contacted the DPS (I have seen the emails)and it should be corrected this week. So it can be done/amended.

[Carryon Regardless]

The way I see it the easiest resolution depends on T A paying the remaining £250.

Allocate that and the existing £250 to T B and they're both covered.

Rent must be due soon(ish) so use the 1st £250 of that for the deposit and T A then has arrears until he finds the rest.

You have me reminiscing now to the days when I took the deposit, held it, and returned what was right to return at the end of tenancy. Ah so simple.

[snorkerz]

FWIW, the DPS seem to have introduced a system to avoid this re-occurring. Now with direct payments you have to log-on to your DPS account and allocate money to the specific tenancy. No idea when this came into effect.

https://www.depositprotection.com/documents/direct-bank-transfer-user-guide.pdf

[gnawood]

Thanks for your comments.

Mortita, the service may appear to be free, but they do keep OUR interest until their costs are covered.

There seems to be no DPS ombudsman. I have been working through their complaints process which as Mortita says takes time and today received the following statement from them on who regulates them;

Quote from DPS complaints handler, email dated 29aug13.

We are not regulated by the Financial Ombudsman Service. Computershare Investor Services (CIS) has been appointed by HM Government as a provider of custodial deposit protection scheme services (The DPS). However, as it is a Government contract our Financial Conduct Authority (FCA) regulatory approvals do not extend to the activities undertaken in relation to The DPS. Having said that, because CIS is a regulated company we do seek to treat all our customers equally and fairly irrespective of whether they relate to our regulated activities. The complaint procedures are therefore consistent across all our business lines.

End quote from DPS complaint handler.

It seems 'Yes Minister' is alive and well with DPS as judge and jury with no recourse.

Note the above quote is not consistent with the boiler plate text at the end of DPS emails which says:

"Computershare Investor Services PLC is authorised and regulated by the Financial Conduct Authority, Registered Office: 25 The North Colonnade, Canary Wharf, London E14 5HS."

Grampa and Cor. Agreed I can chase the tenants and fix it that way if the tenants are helpful. But why should I have to do all the work and carry the risk of non compliance and upset tenants when I acted correctly in good faith and its the DPS computer that made at least two basic mistakes.

* DPS ignored the bank reference info accompanying the transfer and auto-allocated the deposit to the wrong tenant,

* DPS failed to note I had multiple open deposits for the same amount which should have triggered an email to me requesting additional information or manual allocation.

The DPS process noted by Fyldeboy is fine for one deposit, but my problem was multiple payments were submitted in a time sequence that differed from the order in which the target deposits were created.

"illegitimi non carborundum"

[Carryon Regardless]

My point was to just find the easiest solution as being correct and going up against these 'who cares disorganisations' just means losing part of your life to prove a point.

Where you may find you're at risk here is trying to sort it to your satisfaction within the 30 day limit. T B could make claim at a later date on that one.

I have a similar problem in that I took 2 T's in 1 week for flats 3 and 4 of the same block.

I registered their deposits at the same time.

I realised later that I have registered them both with the DPS as living at flat 3.

I looked for an easy solution and concluded that the only way would be to refund the deposit for flat 4 and start again. Complicated as the DPS don't see anyone at flat 4.

At the close of tenancy I expect I'm at risk as I've protected the deposit but not correctly.

[Melboy]

Just a slight hi-jack of the main topic.

I am about to re-let my flat and I have to take a deposit on it. I have not had to concern myself with this matter of deposits being protected as my properties have tenants in occupation pre-2007 or as in another case I took no deposit from the start.

So.........I looked at DPS.........seemed Ok to me for what was on offer... so here is my question.

Do you protect the deposit for free and DPS have the deposit money?

Do you pay the £15 insurance backed guarantee to DPS and keep the deposit money yourself ?

I am thinking as my tenant is going to be long term it might pay me to go for the £15 insurance backed scheme??

[Mortitia]

£15 - mmmm so how do they make any money I would like to know. Is that just a one off payment and nothing more?

I have never looked into these schemes in detail but I don't see how for a small premium it can work?

[Melboy]

£15 - mmmm so how do they make any money I would like to know. Is that just a one off payment and nothing more?

I have never looked into these schemes in detail but I don't see how for a small premium it can work?

Yes....Just the one-off payment of £15.......

According to their T&C's they make their money from the interest on the deposits if you wish to use the free service of depositing that is.

I have to say I can't find any fault as such in the scheme and I do like to study in detail for any clauses that are not suitable.

https://www.depositprotection.com/

For those people not familiar with this scheme.

[Richlist]

My agent is a registered deposit taker and charges landlords £10 per deposit to protect/ issue the PI etc. They make a little bit on interest but with rates so low its obviously not much.

[Grampa]

Having used both insurance and custodial schemes I find it gives you more control of the deposit if you hold it yourself and you can release the funds faster and get any works done. If it is just a one off fee of 15 quid I would go for it but watch out in case you have to pay again on contact renewals.

Normally most tenants agree (might not be happy) that carpet or cleaning is needed if you have a inventory to prove it (confirmed in writing that there will be a deduction)) so we just return the bal as full and final settlement. Works for us and the

[Melboy]

If it is just a one off fee of 15 quid I would go for it but watch out in case you have to pay again on contact renewals.

"You retain the deposit and protection is provided for the duration of the tenancy for a fee. There are no registration or annual renewal fees, and the scheme is available to letting agents, landlords and organisations"

Fairly clear and precise really. Unusual for anything the government meddles in.