Royal Mail hit with £1.6m in fines

Ofcom has fined Royal Mail a total of £1.6 million in fines due to poor performance and overcharging.

The regulator fined the postal operator £1.5 million for failing to meet its first-class mail delivery target in 2018/19. It is required to deliver a minimum of 93% of first class mail within one working day of collection. Royal Mail hit 91.5% in that time period.

In a statement the oversight body said, “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.”

In addition to not meeting its regulatory requirements, Royal Mail overcharged customers for second class stamps between 25 March and 31 March 2019.

Ofcom said in a statement, “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.”