The Communities and Local Government Committee said letting agents should have to meet the same standards as estate agents, which would include the Office of Fair Trading (OFT) having powers to ban those who indulge in "sharp practice".
All property listings should list the full fees that a tenant would have to pay for the tenancy, the committee said, forcing letting agents to be much more up-front about costs before the tenant signs up and making it easier for renters to pick the best deal.
A cost breakdown clearly displayed on property websites and in estate agents' windows would put an end to hidden and "opaque" charges, according to the Private Rented Sector report.
The Government should also come up with a standard "plain language" tenancy agreement for general use, including an easy-to-read factsheet setting out landlords' and tenants' rights and responsibilities, the report said.
Letting agents have come under strong criticism in recent months, with the Royal Institution of Chartered Surveyors (Rics) likening the sector to ''the property industry's Wild West''.
"This lack of regulation is giving rise to sharp practice and abuse by some letting agents. We were told that the letting sector was the property industry's 'Wild West'. 'Cowboy' agents who rip off landlords and tenants have to be stopped."
Charity Shelter recently branded letting agents' fees as "truly out of control" after finding that tenants are having to go without food or turn off their heating to cover the costs.
The charity previously found that tenants were being charged £350 in fees on average to set up a tenancy, on top of deposits and up-front rent. These costs were in spite of agents often receiving separate fees from landlords to set up a new tenancy on their behalf.