An estimated 20% of letting agents are still not signed up to a Client Money Protection scheme despite it being made a legal requirement in April.

Regulator the National Trading Standards Estate and Letting Agency Team (NTSELAT), is cracking down on non-compliance and said it is working with local authorities and the six approved providers to spot those who have not signed up as well as those not displaying the scheme they are part of.

James Munro, head of NTSELAT, said: “We act as the lead enforcement authority for the Tenant Fees Act.

“The team is working with the approved CMP schemes and local authorities to ensure that agents who are required to belong to a scheme are correctly registered with one of the six approved schemes.

“We have arrangements with local authorities to refer cases for enforcement, and a backstop arrangement where we will take action in cases where a local authority cannot.

“With the support of the schemes, we are also proactively monitoring websites to ensure agents are clearly displaying their membership.”

One provider, Client Money Protect, which provided the data, said it has already been contacted by an agent who is a member but received a letter from NTSELAT as he was not displaying the logo.

Eddie Hooker, chief executive of Hamilton Fraser, parent company of Client Money Protect, said: “The requirement for all letting and property management agents in the private rented sector in England to join a Client Money Protection scheme has been heavily publicised, and agents cannot hide behind ignorance as an excuse for non-compliance.

“Those who are not complying with their legal obligations under the Act could face a fine of up to £30,000, so we urge all agents to check that they are covered as a matter of urgency.”

There were warnings earlier this year that banks are making it hard for agents to set up client money accounts in order to comply, with one financial institution asking agents to set up a separate account for each landlord.

A spokesman for Client Money Protect said: “It is possible that some agents have had difficulties with opening client accounts but feedback suggests it is predominantly a lack of awareness or non-compliance.”

Agent trying to comply with law told by bank to open 90 different client accounts