Postcomm consults on Royal Mail's 'complicated' compensation schemes

Postcomm, the independent regulator for postal services, today launched a consultation on Royal Mail’s current compensation schemes for loss, damage and delay which many customers are finding difficult to understand and use.

Royal Mail’s currently has four compensation schemes for loss and damage. Postcomm is proposing that Royal Mail introduces a single loss and damage scheme governed by a clear and simple framework of principles.

The consultation also seeks views on whether, now competition has started to develop, it remains appropriate for Postcomm to require Royal Mail to pay compensation to bulk mail customers for delivery delays and, if so, what type of scheme should be required for these customers in the future.

Postcomm chairman Nigel Stapleton said:

“Royal Mail’s current compensation schemes for loss and damage have developed over many years and have become difficult for customers to understand. We think it important to cut through this complexity and make sure mail customers have access to a clear, fair and user-friendly compensation system.

“While the overall volume of lost, damaged and delayed post is very small in the context of the total amount of mail carried by Royal Mail, every item is valued by customers. This is an important issue which requires thorough consideration on whether the existing arrangements provide sufficient protection to the unfortunate minority of customers who have to seek compensation.

“Our consultation covers Royal Mail’s own proposals for changes to its schemes but we have also suggested some other options and Postcomm wants to hear the views of a wide range of mail users on how the current compensation arrangements could be improved.

Postcomm wants to hear from both retail customers and from bulk mailers as to whether they are supportive of the regulator’s proposals to simplify the schemes and to reduce the degree of regulation over this aspect of Royal Mail’s business.

Notes for editors

Printed versions of the consultation document, Royal Mail’s Compensation Schemes for Delay and Loss and Damage (pdf, 386KB), will be available shortly Postcomm at 6 Hercules Road, London, SE1 7DB. Responses are requested by 13 February 2007.

Postcomm is asking mail customers for their views on a series of questions, including:

How to address the inequality between loss and damage and delay compensation payments
Royal Mail’s use of stamps as a form of compensation
The evidence required to support a claim for compensation
Eligibility for compensation for users of Royal Mail’s Articles for the Blind Service
The continuation of a compensation scheme for bulk mail customers enforced by Postcomm .
The following table shows Royal Mail’s estimates of the level of lost, damaged and delayed mail in 2005-06:

Compensation Issue Number of items Complaints received1 Compensation paid1
Lost Mail2 11.4 million4 734,000 £7.7 million
Damaged Mail 1.3 million4 56,000 £640,000
Delayed Mail3 243 million 37,000 £301,000
Totals 256 million 827,000 £8.6 million

1 Excluding Special Delivery Next Day and Special Delivery 9am

2 Including complaints categories loss and part loss

3 Including complaints categories delay and substantial delay. This category includes delay to 1st and 2nd Class Stamped and Metered mail and Standard parcel. This does not include delay to bulk mail.

4 Including Royal Mail’s licensed products and services only.