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Royal Mail fined £1.5m for overcharging customers, missing delivery target

Christian Fernsby ▼ | July 10, 2020
Ofcom has fined Royal Mail £1.5m for failing to meet its regulatory first-class delivery target in 2018/19.
Royal Mail
Fine   Royal Mail
Royal Mail is required by Ofcom to deliver at least 93% of first-class post across the UK within one working day of collection. In 2018/19, 91.5% of first-class post was delivered on time.

Topics: Royal Mail

Ofcom can consider evidence submitted by Royal Mail of any exceptional circumstances, beyond the company’s control, that may have explained why it missed the target by such a significant amount. But it did not provide a satisfactory explanation and it did not take sufficient steps to get back on track during the year.

So 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 coronavirus, the company met its regulatory obligations.

Ofcom has also fined Royal Mail £100,000 for overcharging customers for second-class stamps between 25 March and 31 March last year.

Ofcom 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.