UK Royal Mail given notice of £7.5m penalty for quality failures

Postcomm today gave Royal Mail 28 days notice that it intends to impose a financial penalty of £7.5m on it for failings in its service to customers.
The penalty relates to two of Royal Mail’s services used by business customers.

First Class Post Paid Impression (PPI) and First Class Response Services. Postcomm imposed an enforcement order on Royal Mail last December in relation to these products. The order required Royal Mail to take certain basic steps to ensure that service quality improved. In spite of this, Postcomm found that Royal Mail failed to do enough to ensure these services met their targets. The company’s performance was around 6% below the agreed licensed targets for the year for both products.

The amount of the penalty takes account of the fact that there is as yet no mechanism by which Royal Mail can be made to pay compensation direct to the customers affected. Postcomm intends to finalise a compensation scheme very shortly.

Postcomm Chairman Graham Corbett said:-

“Most businesses lose customers and lose money when they provide poor service. I hope that this penalty will drive home to people at all levels in Royal Mail the message that customer service matters.”

Royal Mail and others have 28 days to make representations to Postcomm in relation to the proposed penalty.