Postwatch funding to be linked to complaints

COMPLAINTS about lost or misdirected letters will cost the Royal Mail nearly pounds 50 a time, under a new scheme for funding postal watchdog Postwatch.

The watchdog, which handled 273,000 complaints last financial year and spent over pounds 10m, or pounds 37 a complaint, has always been funded by the Royal Mail through a licence fee.

However, the Royal Mail said yesterday it would now pay Postwatch directly and in proportion to the complaints received. For the first 27,500 complaints received, Royal Mail will pay pounds 45. Any complaints after that will cost pounds 36.

Postwatch chairman Peter Carr said complaints were “a barometer of service quality”. “The agreement we have reached will ensure that Postwatch has the resources in place to respond to customers .”

Not all complaints made to Royal Mail are passed on to Postwatch by customers who feel they have been badly handled. A Royal Mail spokesman said that the organisation received 1.6m complaints in the 2003-04 financial year and that the volume of complaints to Postwatch represented fewer than one for every 750m letters posted.

According to the Postwatch annual report, the complaints dealt with last year include that of a customer who posted a blank envelope with pounds 190 in cash in it by mistake. The collecting driver at the postbox refused to look for the item. Royal Mail refused to compensate the customer, but Postwatch obtained a full refund.

Insiders at Royal Mail are known to be sharply critical of high spending at Postwatch.

Royal Mail to pay for complaints NEWS DIGEST
Financial Times UK, London Ed1, p 2 03-05-2005
By By REBECCA BREAM

Royal Mail will soon have to pay up every time a complaint is received from a disgruntled customer because of a new funding arrangement for Postwatch, the consumer watchdog. The move is part of a government initiative to link the funding of consumer councils to the level of complaints, giving companies an incentive to improve their service.

From April, Royal Mail will pay Pounds 45 for every complaint Postwatch receives, dropping to Pounds 36 after the first 27,500 complaints. Postwatch said complaints about poor service at Royal Mail had risen from 6,000 in its first year to 28,000 last year.

Peter Carr, Postwatch chairman, said the arrangement contained “a degree of penalty” that would “focus Royal Mail’s attention on the need to reduce the number of complaints” from customers.

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