Zero Deposit has appointed former ARLA president Peter Savage as its official spokesman.
Savage has held various roles within ARLA Propertymark, including two terms as president in 2015/16 and 2018/19.
He remains a member of the Propertymark board, a position he has held since 2015.
ARLA itself does not back any individual deposit replacement products and has not endorsed the sector itself, but has issued a factsheet that calls for agents to conduct due diligence on the schemes and describes them as “relatively unproven”.
Savage said: “I have watched the growth of the deposit replacement product market with interest. It offers a fantastic opportunity for landlords and tenants alike, but as with any new industry, it is liable to rogue entrants too.
“Much of my career has been spent raising standards in our industry and placing consumer protection and transparency at the heart.
“In the deposit replacement sector, it is crucial that landlords are fully aware of the level and consistency of their cover and that tenants fully understand what they are and are not covered for when they buy a deposit replacement product.
“To ensure this is the case, I firmly believe that deposit replacement should evolve as a regulated marketplace, and I look forward to doing what I can to promote this message and all of the safeguards and protections that regulation brings.”
The announcement came as Zero Deposit welcomed scrutiny of the emerging sector.
It was revealed during The Property Ombudsman conference this week that its consumer forum is frequently asked to look at deposit replacement schemes.
Jon Notley, chief executive of Zoopla-backed Zero Deposit, said regulation is needed in the market to protect users.
Different levels of regulation exist in the deposit replacement market, he said, with only a few offering Financial Services Compensation Scheme protection if they go bust and some having no authorisation from the Financial Conduct Authority at all.
Notley, who has written to the FCA to push for further regulation of alternative deposit schemes, said: “For many months, we’ve encouraged this level of scrutiny of deposit replacement, and more dialogue around the importance of FCA regulation. We strongly believe that the risks highlighted by TPO will emerge unless this new market develops responsibly.
“FCA rules exist to protect customers and the integrity of the market generally, including the reputation of those who distribute the products, in this case letting agents.
“Regulated products are required to offer good value and set out the risks to customers clearly before they purchase.
“Furthermore, letting agents are restricted in what they can do in promoting the product to ensure that it is not mis-sold.
“Worryingly we have seen unregulated providers position these restrictions as a disadvantage, when actually they are there to avoid tenants being sold a product that may not be suitable for them.
“When you consider some of the unregulated schemes that have emerged, and the terrible value for money they can offer to tenants, or the absence of contractually binding guarantees for landlords, we are not surprised that the TPO is seeing complaints.
“Landlords will assume agents have done their homework on their provider. If one of these schemes were to fail or get caught up in scandal, potentially leaving landlords with no protection, any agent who is seen to have recommended such schemes could find their reputation in tatters.”
Reposit has also backed further regulation of schemes to ensure tenants and landlords are treated fairly.
Its chief executive Jude Greer said: “Tenants should be allowed to make complaints if they have been mis-sold a product and/or the company was not transparent enough, and it is possible that there could be an uplift of complaints in our sector if proper procedures were not put into place.”
Greer said the solution to preventing complaints was FCA regulation and a “detailed onboarding process” to ensure agents understand how to introduce the product and how it applies to their tenants.