Postcomm agrees changes to Royal Mail's retail compensation schemes

21 May 2008

Postcomm, the independent regulator for postal services, today agreed Royal Mail’s proposed changes to its retail compensation arrangements for lost, damaged and delayed mail.

The key changes, which will come into effect on 1 August 2008, are:

  • For items posted with Royal Mail which have no intrinsic value (for example a 1st or 2nd class letter), or where a claimant cannot provide proof of posting, there will be compensation for loss, damage and delay of a minimum of six 1st class stamps (currently worth £2.16);
  • For items that have an intrinsic value, with proof of posting with Royal Mail and proof of value (such as an invoice or receipt) customers will be entitled to a postage refund plus compensation for actual loss up to the value of the item, or 100 1st class stamps (currently £36), whichever is the lowest;
  • compensation for delayed retail mail will become payable one day earlier than at present – three working days after the due delivery date instead of four;
  • £5 and £10 payments for delay and substantial delay will be discontinued, except for Special Delivery Next Day (not posted on account);
  • Redirected retail mail will now be eligible for compensation for delay; and
  • users of the Articles for the Blind service will now be able to claim compensation for loss, damage and delay.

The new compensation arrangements simplify and align the processes for making a claim, the evidence required to support a claim, and the compensation payments themselves.

Royal Mail estimates that the new arrangements will result in a slight overall increase in the total compensation payable under the retail scheme.

Notes for editors:

Postcomm is still considering whether to remove the bulk compensation scheme from regulation when it makes a final decision on Royal Mail’s application for suspension of the scheme and the so-called “C-factor” in 2007-08 due to industrial action arising from its transformation plan.

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