The Daily Telegraph has reported that Purplebricks could face a bill of as much as £30m “after it put thousands of landlords at risk of being fined.”

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The newspaper says: “It is understood that since the online estate agent was founded in 2012, it has failed to properly serve legally required documents to tenants explaining their deposits have been put into a national protection scheme.

“These documents, known as prescribed information, must be given to tenants within 30 days of the deposit being paid. Failure to do this means the tenant can claim back up to three times the value of the money.

“Tenants have a six-year limitation period in which to make a claim against either the agent or their landlord. A source with knowledge of the business said Purplebricks' historic liabilities could be as high as £30m, assuming everyone eligible to make a claim did so."

The article includes a quote from Alisha Butler of Phoenix Solicitors, a legal firm engaged to represent clients in making claims against Purplebricks, as saying: “The court does not have discretion as to whether they can or cannot award compensation; they must award it if the landlord or agent has breached their obligations."

Purplebricks has just released a statement to the media that says: “We have recently become aware of a process issue in how we have been communicating deposit registrations with our tenants.

“This is an administrative issue and tenants’ deposits have been secure at all times. We are currently investigating the matter fully.