Watchdog fines Royal Mail £7.5 million

Tuesday, 30 September 2003 12:00 AM

Royal Mail has been fined £7.5 million by postal service regulator Postcomm for 'failings in its service to customers'.

The penalty relates to two of Royal Mail's services used by business customers: First Class Post Paid Impression (PPI) and First Class Response Services.

Postcomm imposed an enforcement order on Royal Mail last December, which required it to take certain basic steps to ensure that service quality improved on both products.

In spite of this, Postcomm states, it found that Royal Mail failed to do enough to ensure these services improved, falling around six per cent short of agreed licensed targets for the year.

Postcomm Chairman Graham Corbett said: "Most businesses lose customers and lose money when they provide poor service. I hope that this penalty will drive home to people at all levels in Royal Mail the message that customer service matters."

Postcomm imposed the hefty fine because there is no mechanism in place by which Royal Mail can be made to pay compensation direct to the customers affected.

The fine is believed to be one of the biggest ever imposed by any regulator.

Postcomm says that it intends to finalise a compensation scheme very shortly.

It has given Royal Mail 28 days to pay.

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