The Association of Resid-ential Letting Agents is warning landlords that they should use regulated letting agents which belong to professional associations.
Arla says it knows of several failures of letting agents this year, with collapses in major cities around the country.
But it says that buy-to-let investors are unaware of the risk to their money posed by the collapse of letting agents.
Arla says its letting agents are fully bonded, hold professional indemnity insurance and are audited by independent chartered accountants.
It says most people would use a regulated agent when arranging travel and urges them to protect their interests in the same way when using letting agents.
More than £1bn is estimated to be held by letting agents at any one time but there is no statutory control over them.
Arla chief executive Adr-ian Turner says: “When people travel, most are conscious of the need to cover themselves in one way or another. Unfortunately, the failure of a local letting agent is not held up as a warning in the same way so we believe we must keep repeating the mantra, always use a regulated agent.”