Estate agents, insurance brokers and travel agents
- This guidance is for England & Wales
Occasionally, when you buy goods, services and digital content, you are not dealing directly with the trader but with an agent or agency. The agent is authorised to bring about an agreement between you (the third party) and the trader they are acting for (the principal).
The agreement made is a contract between the principal and the third party but there is also a duty for agents to ensure the advice they give you is correct.
Most contracts are covered by the Consumer Rights Act 2015 but you should also be aware of specific laws that may apply, such as the Consumer Credit Act 1974 and the Estate Agents Act 1979.
What is agency?
An agency agreement is one set out in a contract or in law whereby one party (the principal) appoints another party (the agent) to act on their behalf, as their authorised representative, to negotiate the sale of goods, services or digital content to a third party (you). The principal can determine the scope and nature of the role performed by the agent and at all times the agent is under the direction and control of the principal. The agent and the principal can be individuals or a different legal entity such as a partnership or a company.
Although an agent may arrange the transaction, they are not usually responsible to you (as the third party) for the contract as long as they act within the scope of the agency arrangement they have with the principal. It is the principal and the third party who have entered into the contract; they have legal rights and responsibilities to each other, as set out in the terms and conditions of that contract.
However, the agent is under a legal duty to exercise reasonable care and skill in their dealings with you and if they fail to do so you may have a claim. Furthermore, the principal may not be legally responsible to you if the agent acted beyond the scope of their agency agreement with the principal or did not act with reasonable care and skill.
The contractual relationship between principals and agents, principals and third parties, and agents and third parties can be complex so you must check the terms and conditions of any contract you may be about to enter into (or have entered into) to establish who is liable to whom and for what.
The contractual relationship between you, the agent and the principal is controlled by many laws. Some laws are general and cover all business sectors - for example, the Consumer Rights Act 2015 applies to the sale and supply of goods, services and digital content, and also includes a requirement that contract terms and notices must be fair. There are also laws that are specific to a particular business sector, such as estate agents, while others control the way traders conduct their business, such as consumer credit.
This guide does not cover all the laws that apply to agencies but key laws have been highlighted to illustrate how they apply to certain agency arrangements.
Examples of agencies
- estate agent
- letting agent
- insurance broker
- travel agent
- credit broker
An estate agent acts as an agent for the seller (the principal) to market and sell their property to a third party (the buyer). The estate agent must comply with all relevant laws, such as the Estate Agents Act 1979 and the Consumer Protection from Unfair Trading Regulations 2008. The Estate Agents Act 1979 regulates the role of estate agents and sets out the duties and responsibilities estate agents have to the seller. Whilst the estate agent's duty of care is to the seller, it must treat both buyers and sellers fairly and honestly. The estate agent must, by law, give the prospective seller written terms of business, which include fees charged and details of services it offers prospective buyers, such as arranging mortgages. The marketing, negotiating, sale process and the way clients' money is handled is also regulated by the Act.
The Consumer Protection from Unfair Trading Regulations 2008 apply to all business sectors, including estate agents. The Regulations prohibit estate agents from engaging in unfair commercial practices when dealing with consumers. This means that if you are a considering using an estate agent's services, have a contract with an estate agent to sell your property, or are an actual or potential buyer of a property, then the estate agent must treat you fairly. The Regulations apply to the full range of estate agent activities that affect consumers.
The Regulations set out what is meant by an unfair commercial practice:
- engaging in a misleading action. Giving you false or misleading information that could influence your decision to go ahead with a purchase. This could include false information in property particulars or misleading photographs of a property
- engaging in a misleading omission. Leaving out or hiding important information. This could include failing to mention existence of a public right-of-way through the garden or shared ownership of a parking area
- engaging in aggressive practices. Using high pressure, intimidating or coercive sales techniques that affect your judgement about whether or not to go ahead with a purchase. This could include pressurising you to accept an offer to buy your property
- failing to be professionally diligent. This means failing to act in a way that is acceptable within the reasonable expectations of an estate agency business
There are 31 business practices that are unfair in all circumstances. An example of one is where an estate agent displays a logo for a trade association or a redress scheme of which they are not a member.
If you believe an estate agent has breached the Regulations report it to the Citizens Advice consumer service for referral to trading standards.
All estate agents must belong to a redress scheme. The approved schemes are the Property Ombudsman and the Property Redress Scheme. These schemes offer you a dispute resolution service if you have a complaint against one of their members.
Letting agents act on behalf of landlords to find tenants for rented properties (houses, flats and rooms within shared houses), collect rent and provide other services, such as dealing with property maintenance and repairs. Whilst you have the legal right to know who your landlord is, your day-to-day dealings will usually be with the letting agent. You should check your tenancy agreement before you sign it so that you know what the landlord's and letting agent's responsibilities to you are.
As with other business sectors, the Consumer Protection from Unfair Trading Regulations 2008 apply to letting agents.
The Regulations set out what is meant by an unfair commercial practice:
- engaging in a misleading action. This could include an incorrect statement in an advertisement about the costs of renting a particular property
- engaging in a misleading omission. Hiding or leaving out important information - for example, that the landlord does not allow tenants to have pets in the property
- engaging in aggressive practices. This could include threats to evict or entering a tenant's property without permission
- failing to be professionally diligent. This means failing to act in a way that is acceptable within the reasonable expectations of a lettings agency business
There are 31 business practices that are unfair in all circumstances. One is these is 'bait advertising' - for example, where a letting agent claims that they have many rental properties available at a low rent but they only have a few.
If you believe a letting agent has breached the Regulations, report it to the Citizens Advice consumer service for referral to trading standards.
Letting agents must be a member of an approved letting agency redress scheme. These schemes provide a free and independent dispute resolution service for letting agents, landlords and tenants. The redress schemes are the Property Ombudsman and the Property Redress Scheme.
Letting agents have a legal duty under the Consumer Rights Act 2015 to prominently display a list of relevant fees at their premises and on their website, if they have one.
See our guide 'Look before you rent' for more information.
The role of an insurance broker is to act as a link between insurance companies and customers. They are regulated by the Financial Conduct Authority. If you are considering using the services of an insurance broker to obtain insurance for you, the broker will be your agent and you will be the principal - they must negotiate suitable insurance protection that is tailored to your specific needs. They can also provide advice and assistance on other matters, such as support in the event of an insurance claim. The broker is under a duty to act in your best interests. If you have a complaint about an insurance broker that you are unable to resolve you can complain to the Financial Ombudsman Service.
A travel agent sells travel products and services on behalf of traders such as travel organisers, airlines and transport and accommodation providers. The traders are the principals and they use travel agents as the 'shop window' to promote and sell travel products and services such as package holidays, accommodation, flights, car rentals, sightseeing tours, holiday insurance and money exchange. They are usually paid a commission for the bookings they take and can also receive payments in the form of bonuses and inducements from traders to promote and sell their products. It is increasingly common for those traders providing travel products and services to sell directly to customers, thus avoiding payment of commission to travel agents.
Providers of travel products and services, as well as agents, must be 'bonded'. The Package Travel and Linked Travel Arrangements Regulations 2018 require travel companies to provide financial protection for payments made by you for certain types of travel services. This means if the travel company becomes insolvent, funds will be available to ensure that you are not left stranded abroad; in the case of an advance booking money will be refunded.
Travel agents should be bonded to an approved scheme such as:
- Air Travel Organisers' Licensing (ATOL)
- Association of British Travel Agents (ABTA)
- Association of Independent Tour Operators (AITO)
- International Air Transport Association (IATA)
Check with the scheme for details of how to make a claim.
The travel company must comply with all relevant laws, such as the Package Travel and Linked Travel Arrangements Regulations 2018, the Consumer Protection from Unfair Trading Regulations 2008 and the Consumer Rights Act 2015. If you have a complaint about a travel product or service, you should complain to the provider. This may be the travel organiser, airline or holiday insurance company (depending on what you bought) as your contract is with them. You can also address any complaints to the travel agent who must forward them to the relevant provider without undue delay. If the travel agent fails to carry out their service properly you have rights and remedies and may be entitled to make a claim. The 'Holidays' and 'Holidays & travellers with disabilities' guides give more information on your rights and remedies.
A credit broker is an individual or a business that links a consumer who requires credit with a finance company that can provide it. Some credit brokers charge a fee for their services but others receive commission from the finance company. The Consumer Credit Act 1974 and the Consumer Credit Act 2006 regulate credit brokerage. The main requirements for credit brokers are to explain to you the key features of a credit agreement, ensure the product they are recommending is suitable for you and, before you enter into any agreement, disclose to you any links they have with the finance provider. The credit broker and the finance provider must be authorised by the Financial Conduct Authority. You can check this on the Financial Conduct Authority Register. Never use a credit broker that is not authorised and always make sure you know who you are dealing with. Credit brokers include:
- independent financial advisers
- motor dealers who organise hire purchase, lending or leasing to allow you to finance the purchase of a vehicle
- traders who introduce you to a finance provider to allow you to purchase goods from the store on credit
You have the right to expect that a credit broker gives you an information notice setting out their firm's legal name, confirming that they are a broker, who they are acting as broker for, details of the fees payable and when the fees have to be paid. A credit broker can only charge a fee if they have provided this notice and obtained an acknowledgement from you that you have received it and are aware of its contents.
If you enter a credit broking contract at a distance (such as online) you have a right to a 14-day cancellation period and if you cancel you can obtain a refund; see our guide 'Distance marketing of financial services: your rights' for more information.
In most cases, the auctioneer acts only as an agent for the seller. The auctioneer invites bids through the auction process for goods placed in the auction by the seller. The buyer may use the services of an agent to act on their behalf to buy goods at auction. Each auction will have terms and conditions setting out the role of the auctioneer and the obligations of the buyer and seller. Before bidding at auction, check the terms and conditions as well as the seller and goods you intend to bid on.
The 'Sale & supply of goods: your consumer rights' guide gives more information on auctions.
Points to note
It is important to find out what the agent's role is and what part they play in the contract you have with the principal.
Make sure you get the agreement with the agent in writing.
Always check all documents you are given, particularly the terms and conditions set out in the agreement. If you do not understand what the terms and conditions mean, or who you have your contract with, contact the Citizens Advice consumer service.
Your attention should be drawn to important points within the agreement.
Some traders refer to themselves as 'agents' or 'middlemen' of the manufacturer, but they are not agents at all. They are responsible in law for the goods, services or digital content that they sell or supply to you.
Check to see if the agent or principal is a member of a bonding or financial protection scheme run by a reputable trade association or official organisation. When you deal with an agent, it is very important to take precautions to safeguard your money and your rights. In some circumstances, payment to an agent could be deemed payment to the principal, but if fraud is involved, this may not be the case.
Consider paying by credit card. If you pay for the goods, services or digital content, and if they cost more than £100 but less than £30,000 you are protected by the Consumer Credit Act 1974. Section 75 of the Act makes the card provider as responsible as the trader for a breach of contract or a misrepresentation. This could include supplying faulty goods, providing a poor service, non-delivery of goods or making false claims about goods or services. You are entitled to take action against the trader, the card provider or both. You should explain to your card provider that you obtained the goods and/or services via an agent. If you are unhappy with the credit card provider's response then you can complain to the Financial Ombudsman Service. This does not apply to charge cards or debit cards.
If you use a debit card to buy goods, services or digital content or if you use a credit card and the price of the goods, service or digital content is less than £100 (your rights under the Consumer Credit Act 1974 would not apply) you may be able to take advantage of the chargeback scheme. Chargeback is the term used by card providers for reclaiming a card payment from the trader's bank. If you can provide evidence of a breach of contract - for example, goods are not delivered, are faulty, or the service is not carried out - you can ask your card provider to attempt to recover the payment. Check with your card provider as to how the scheme rules apply to your card, whether internet transactions are covered and what the time limit is for making a claim.
- Key legislation
- Consumer Credit Act 1974
- Estate Agents Act 1979
- Consumer Credit Act 2006
- Consumer Protection from Unfair Trading Regulations 2008
- Consumer Rights Act 2015
- Package Travel and Linked Travel Arrangements Regulations 2018
Last reviewed / updated: August 2018
- Please note
This information is intended for guidance; only the courts can give an authoritative interpretation of the law.
The guide's 'Key legislation' links may only show the original version of the legislation, although some amending legislation is linked to separately where it is directly related to the content of a guide. Information on amendments to UK legislation can be found on each link's 'More Resources' tab; amendments to EU legislation are usually incorporated into the text.
For further information in England and Wales contact the Citizens Advice consumer service on 03454 040506. In Scotland contact Advice Direct Scotland on 0808 164 6000. Both provide free, confidential and impartial advice on consumer issues.
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