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Royal Mail fined £1.5m for missing 2018/19 delivery target

Ofcom recently (10 July 2020) fined Royal Mail £1.5m for failing to meet its regulatory first-class delivery target in 2018/19.

  • 91.5% of first-class post was delivered next working day in 2018/19, against a target of 93%
  • Royal Mail also fined £100k for overcharging customers for second-class stamps last year

Royal Mail is required by Ofcom to deliver at least 93% of first-class post – across the UK – within one working day of collection. In 2018/19, 91.5% of first-class post was delivered on time.[1]

Ofcom can consider evidence submitted by Royal Mail of any exceptional circumstances, beyond the company’s control, that may have explained why it missed the target by such a significant amount. But it did not provide a satisfactory explanation and it did not take sufficient steps to get back on track during the year.

So we have decided to impose a fine of £1,500,000 on Royal Mail for failing to meet its first-class delivery target.

Royal Mail’s performance improved in 2019/20, and after taking into account the impact of Covid-19, the company met its regulatory obligations.

Additional £100,000 fine

Ofcom has also fined Royal Mail £100,000 for overcharging customers for second-class stamps between 25 March and 31 March last year.

We set a price cap for second-class stamps to ensure that an affordable postal service is available to everyone, while keeping the universal service financially sustainable.

For 1 April 2018 to 31 March 2019 the cap was set at 60p. Royal Mail increased its price for second-class stamps to 61p on 25 March 2019, thereby overcharging customers for seven days until the cap increased on 1 April 2019.

The company estimated that it overcharged people by approximately £60,000 in total as a result, which it is unable to refund.

Given the harm caused and failure in its processes to stick to the price cap, we have decided to fine Royal Mail £100,000. It has since made changes to its compliance processes that it says will prevent this error from happening again.

Royal Mail has co-operated with our investigations and did not contest our findings. The fines will be passed on to HM Treasury.

Gaucho Rasmussen, Ofcom's Director of Investigations and Enforcement, recently said: 

“Many people depend on postal services, and our rules are there to ensure they get a good service, at an affordable price. Royal Mail let its customers down, and these fines should serve as a reminder that we’ll take action when companies fall short.”

Notes to Editors

After considering evidence put forward by Royal Mail, we decided to adjust its performance to take into account the impact of Highways England’s road investment programme on the company’s delivery performance. Despite this adjustment, Royal Mail still failed to achieve its first-class delivery target by 1.1%.

 

Channel website: https://www.ofcom.org.uk/

Original article link: https://www.ofcom.org.uk/about-ofcom/latest/media/media-releases/2020/royal-mail-fined-for-missing-target

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