Postcomm proposals aim to simplify Royal Mail's compensation schemes

Royal Mail’s current schemes are inconsistent and difficult for customers to understand.
Proposals aimed at simplifying current schemes to make them easier to use.
Postcomm proposes to remove bulk mail from the compensation scheme in April 2009.

Postcomm, the independent regulator for postal services, has outlined proposed changes to Royal Mail’s compensation schemes for lost, damaged and delayed mail to make them fairer and more suited to customer needs.

The regulator has conducted a public consultation and worked closely with Royal Mail and Postwatch to address concerns about the complexity of Royal Mail’s current compensation schemes for retail customers and some inconsistency in how they are applied.

Following this review, Postcomm is proposing to remove bulk mail from a regulated compensation scheme for delay. Competition for bulk mail customers has developed to a point where the regulator is proposing that it is more appropriate to move towards a market driven option allowing the growth of schemes which reflect the differing needs of large mailers.

Royal Mail’s retail customers should face less difficulty in pursuing their claims because, for retail mail that has been lost, damaged or delayed, the proposals aim to simplify and align:
– the processes for making a claim;
– the evidence required to support a claim; and
– the compensation payments themselves.

Postcomm chairman Nigel Stapleton said:

“Royal Mail’s compensation schemes for their retail customers have developed over many years and have become difficult for customers to understand. Recognising this, Postcomm has worked closely with Royal Mail and Postwatch to try and find ways to cut through the complexity and make sure mail customers have access to a clear, fair and user-friendly compensation system.

“Postcomm is committed to remove prescriptive regulation where possible and the development of competition for the business of the largest mailers means we are proposing to do so by withdrawing the regulated bulk mail compensation scheme from April 2009 in favour of solutions based on individual customer need.

“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 and they should be properly compensated when there are such problems.”

The key proposals for compensation for lost, damaged and delayed mail are:

– where the item was posted with Royal Mail, there will be compensation for first time claimants for loss, damage and delay where an item has no intrinsic value or where a claimant cannot provide proof of posting;
– loss and damage to items with an intrinsic value, with proof of posting and value, will entitle customers to a postage refund plus compensation for actual loss up to the market value of the item or the current statutory maximum of £34, whichever is the lower;
– monetary compensation payments for delay and substantial delay will be removed, along with the substantial delay category for non-Special Delivery items; and
– users of the Articles for the Blind service will be able to claim compensation for loss, damage and delay.

These proposals are subject to a two-month consultation period, with response requested by no later than 18 February 2008. Postcomm will assess the responses received to the proposals in this document, and aims to publish its final decision by 30 April 2008.

The UK postal market

– Over 80 million items are delivered each day six days a week to more than 27 million addresses;
– The letters market was opened to full competition on 1 January 2006;
– Postcomm has licensed 18 companies to compete with Royal Mail;
– Royal Mail is by far the biggest operator with more than 90 pct of the market