Ofcom fines Royal Mail £1.5m for falling short of delivery targets and overcharging for stamps

Royal Mail has today been fined more than £1.5m for failing to meet delivery targets and overcharging for stamps.

Ofcom announced this morning that Royal Mail will have £1.5m for failing to meet its regulatory first-class delivery target in 2018/19.

The service is required by Ofcom to deliver at least 93 per cent of first-class post in the UK within one working day of collection, but figures fell short by 1.5 per cent last year.

Ofcom has also fined Royal Mail an additional £100k for overcharging customers for second-class stamps for a week last year.

The price cap for second class stamps was increased from 60p to 61p in April last year, but Royal Mail upped its prices a week early - which Ofcom said amounts to £60k of overcharging.

Gaucho Rasmussen, Ofcom’s director of investigations and enforcement, commented: “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.”

Royal Mail commented: “We are disappointed with our First Class regulated Quality of Service performance in 2018-19. We accept and understand Ofcom’s decision.

“We are pleased that Ofcom has taken into account the unprecedented impact of the coronavirus pandemic on our operation when assessing our 2019/20 First Class Quality of Service performance.

“We worked hard to restore our service quality in 2019-20 and, were it not for the pandemic and its impact on our business in the latter half of March, we were on course to deliver the requisite First Class regulated Quality of Service target (93 per cent).

“Despite our best endeavours, some areas of the UK experienced a reduction in service levels during March. Relevant factors included high levels of coronavirus-related absences and necessary social distancing measures.

“We accept and note Ofcom’s decision around the 2019 Second Class price cap. We made a mistake.

“Due to an error on our part, our price for Second Class stamps was 1p above the requisite regulatory cap for seven days.

“At the time, we sought to put this error right by publicly acknowledging our mistake.

“We also donated the revenue that we expected to make from this error - £60,000 – to our chosen charity Action for Children which helps young people at risk of developing mental health problems.

“We worked with Ofcom throughout this investigation and lessons have been learned by us during this process.”