Almost one in three renters is unaware of their right to have their deposit ring-fenced so that their cash is kept safe, a housing charity found.
With the average deposit a tenant has to hand over costing £992, Shelter is urging people to check that their landlord has met requirements to place their deposit in a Government-backed scheme within 30 days of receiving it.
Some 30% of 4,000 private tenants surveyed in England were in the dark about their landlords' obligations to protect their deposits, Shelter found.
As well as protecting the deposit from being unfairly withheld, tenancy deposit protection schemes act as independent mediators, helping both landlords and tenants, if tenants believe unfair deductions have been made when a tenancy ends.
Campbell Robb, chief executive of Shelter, said: "We campaigned for this change in the law to stop renters from losing money in unfair deposit deductions, so it's extremely worrying that so many are still unaware of their tenancy deposit rights.
"We know that most landlords do the right thing but unfortunately some are still unaware of their responsibilities to protect the deposits that are given to them in good faith. At Shelter we hear from thousands of renters who have huge chunks deducted from their deposit for no good reason, or who have to wait months to get their money back."
One in 14 tenants was forced to borrow money, such as taking out credit card debt or payday loans last year to cover their deposit costs, Shelter said.
Landlords who fail to place their tenants' deposit in an authorised scheme within 30 days of receiving it or can be taken to court. They could face a penalty of one to three times the value of the deposit, which is then awarded to the tenant.
Housing Minister Mark Prisk said: "Tenancy deposit schemes offer vital protection for both tenants and landlords, giving them financial peace of mind and offering neutral help to resolve disputes.
"In March alone, 2.6 million deposits were protected by Government-backed schemes, and over the last six years, more than seven million deposits have been protected. But there's always more to do to ensure that people know, and exercise their rights, and I hope that with Shelter's help, even more tenants will know how to ensure their hard-earned cash is safe."
Beware the small print
Many tenants 'in dark' over deposit
It is reasonable to assume that if you take out a mobile phone contract at £30 a month for 24 months that's exactly what you'll pay unless you exceed the tariff. Yet mobile phone providers have come under fire for a snag buried in the small print – a clause to allow mid-contract price rises.
Prices are rising by a median of 81p a month and 70% of consumers are completely unaware off this sneaky move, according to Tesco Mobile, so be sure to check any new contracts before you sign the dotted line.
Financial service providers always refer to 'typical APR' in advertising to attract customers with favourable rates of interest.
Yet the typical APR on loans and credit cards is only available for those applicants who have a squeaky clean credit record, everyone else could end up with a much higher rate. For example, under EU rules, credit card providers only have to provide the typical APR advertised to 51% of applicants.
So always consider this when applying for accounts and products, and if approved – look out the actual APR that you will be charged.
The highest paying savings accounts on the market tend to come with a string of strict terms, which if you fall foul of, result in a drop in interest. Common requirements include paying in a set sum each month and not making withdrawals during a set period.
Make sure to fully understand these terms before opening a savings account and if you choose an account with a six or 12 month bonus, remember that this will plummet when the bonus period ends.
Cashback credit cards that pay you a small percentage each time you spend on the card are full of loopholes in the small print. All have a maximum spend, but many have a minimum spend too.
For example, the Sainsbury's Cashback Low Rate card advertises that it offers users 5% cashback for the first three months. However the 5% cashback is capped at £50 a month. A further 5% cashback is subject to you spending £500 a month on the card (£250 of that at Sainsbury's).
Attempt to repay your mortgage early and you may be greeted with a hefty fee in the form of an early repayment charge. These penalties vary from lender to lender and even deal to deal, but are typically be around 10% of the outstanding balance.
Details of any early repayment charges should be clearly outlined in your mortgage contract but it is worth double-checking with your lender before you try to make a payment.
Insurance is an incredibly complex area of personal finance and different forms of cover are riddled with different hitches that make it crucial to read the small print. Failure to do so could lead you to pay for a product you would be never be able to claim upon, or unknowingly do something that invalidates your claim.
Always buy the right level of cover for your needs and pay close attention to any exclusions in the policy wording. For example, many travel insurance policies for winter sports won't pay out for treatment of injuries incurred while under the influence of alcohol.
Think a credit card can't do any damage at home in your drawer? Think again. Some credit and store cards charge a dormancy fee if you don't use them regularly.
For example, all Santander-issued store cards, including Topshop and Laura Ashley cards among others, charge a fee of £10 if you remain in debit for three consecutive months.
Exceed the monthly usage allowance in your broadband deal and you could be hit with a huge fee. Common with the cheapest broadband deals on the market, penalty charges for going over your contracted limit can push your bills up even higher than if you paid for a deal with unlimited usage.
According to Talk Talk, some households are being forced to pay an additional £40 per month for exceeding their usage allowance. BT for example, charges £5 per every 5GB extra used.
Familiarise yourself with the download limit in your package and the penalties for exceeding it, decide whether you are better off with an unlimited deal.