Royal Mail fined £7.5m for 'service failings'

The Royal Mail has been fined £7.5 million for "failings in its service to customers", the post watchdog has said today.

The fine relates to two of Royal Mail’s services used by business customers: First Class Post Paid Impression (PPI) and First Class Response Services. The target for both services is delivery of 92.5% of post the next day. For February and March 2003 (the period for which the target was measured), First Class PPI recorded 86.3% and First Class Response Services 86.8%.

Under Royal Mail’s licence, the company commits a breach if it fails to meet a service quality target and can be shown not to have used all reasonable endeavours to try to meet it. That was Postcomm’s finding in relation to these two products for 2002/3.

Postcomm imposed an enforcement order on Royal Mail last December in relation to these products requiring 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.

In a statement, Postcomm said: "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 he hoped that the fine would "drive home" to people at all levels in Royal Mail "the message that customer service matters".

Postcomm gave Royal Mail 28 days notice that it will impose the penalty and, if confirmed, the fine will be payable in one instalment, 49 days after the imposition of the penalty.

(gmcg)