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Royal Mail has been fined £1.5m by its regulator for missing delivery targets for first-class post and £100,000 because it overcharged for second-class stamps.
The letters and parcels company is required to deliver at least 93% of first-class post across the UK within one working day of collection but in 2018-19 just 91.5% was on time.
Ofcom, the regulator, said Royal Mail did not give it a satisfactory explanation for the “significant” target miss and did not do enough to get back on track during the year. It therefore fined Royal Mail £1.5m.
Royal Mail said: “We are disappointed with our first-class regulated quality of service performance in 2018-19. We accept and understand Ofcom’s decision.”
Royal Mail’s performance improved in 2019-20 and Ofcom said it met its obligations taking into account disruption caused by Covid-19.
Ofcom also found that Royal Mail overcharged for second-class stamps for a week at the end of March 2019. Royal Mail increased the cost of a second-class stamp by 1p to 61p seven days before a price cap expired. The result was customers were overcharged by about £60,000 that cannot be refunded.
Royal Mail has changed its processes so that the error will not happen again, it told Ofcom. Royal Mail said it accepted the £100,000 fine and had worked with Ofcom to put things right. It said it donated £60,000 to Action for Children, a charity for young people’s mental health, in response to its error.
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.”
