Royal Mail technology glitch wrongly accuses clients of fraud

• 4 April 2022
• Transport / Logistics Services

Hundreds of small businesses say they have been falsely accused of fraud by Royal Mail and been wrongly fined by its automated system. The issue has been raised by the Federation of Small Businesses and Ofcom has indicated it is aware of the issue.

The problem has emerged after Royal Mail started using software to replace manual fraud detection. Royal Mail initially denied there was a problem and, resonant of the Post Office New Horizon scandal, continued to fine the businesses for fraud. In some cases the fines have brought businesses to the brink of insolvency.

The businesses affected have contracts with Royal Mail and don’t have to go to a Post Office to have their mail checked for delivery. This allows them to send packages less than 25mm deep and 750g in weight and to self-certify that these are within the size limits.

The false accusations of fraud started to emerge at the beginning of 2022 when the postal operator began phasing out manual systems for detecting fraud in favour of the automated system.

Royal Mail’s new machines use lasers to detect packages exceeding the size limit and impose a surcharge of around £3 where fraud is detected, on top of pricing of around £0.80-£0.90. Businesses say that the fraud detection system adds the surcharge if the letter is scrunched up or if the envelope corners rise in transit.

Some small businesses have been hit with unnecessary surcharges of £1,000 a month. The issue has been raised through business networks and ultimately the Federation of Small Businesses. Martin McTague, the federation’s chairman, said: “With spiralling overheads already eroding margins, the last thing small businesses need is retrospective charges on letters that they’ve been assured are fine to send.

“In this climate, firms simply don’t have the funds or the bandwidth to navigate additional fees after the event.

“Royal Mail should move fast to address issues raised with its new scanning machines and ensure that, starting immediately, all fees charged to small firms at the point of sending are fair and accurate.”

While postal regulator Ofcom cannot take on individual complaints, it has been made aware of the wider issue. “If we see evidence of widespread issues that could be in breach of our rules, we’ve shown we won’t hesitate to step in and take action,” a spokesperson said, adding “If you believe you’ve been incorrectly charged, you can complain to Royal Mail and escalate to the independent ombudsman if necessary, who can make a binding ruling on your case.”

A Royal Mail spokesman said: “As part of our ongoing transformation, we have been rolling out new automated parcel-sorting machines, which can also verify whether customers are paying us the correct amount for the items they’re sending.

“In instances where customers believe they have received surcharges which are not appropriate, we have teams of people across the UK who can work with the customer to review the items and charges applied.”