Royal Mail fined £1.5 million by Ofcom

Royal Mail fined £1.5 million by Ofcom

Ofcom has today fined Royal Mail £1.5 million for failing to meet its regulatory first-class delivery target in 2018/19.

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.

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, 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.”

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1 Comment

  1. Colin Henderson

    Being a postman, as much as Royal Mail are at fault for falling 1.5% below the required delivery target, I think its unfair on us delivery staff as we have been out through good and bad trying to get all delivered, to say we failed is a tad harsh. The problems laid with the higher echolon of Royal Mail and its previous CEO. The 91.5% was delivered during uncertain times with strike action looming over staff and management relations, staff shortages due to cuts etc. Even in the rocky covid situation we are vehemently getting mail and parcels delivered with staff on 3 month isolations, sickness and holidays. I understand that rules have to be adhered to but a little understanding of the circumstances we were in and still continue to work in. Its bad we missed by 1.5% but we worked really hard to get the 91.5% delivered is all I’m saying.

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