Royal Mail fined for late letters and overcharging

Royal Mail has been fined £1.5m by the regulator for being late with first class deliveries and overcharging customers for second class stamps.

Ofcom said Royal Mail missed its target of delivering 93% of first class post within a day of collection.

It also overcharged people £60,000 after raising the cost of a second class stamp before a price cap was officially lifted.

Royal Mail admitted it was "disappointed" with its performance.

In the 2019 financial year, Ofcom found that only 91.5% of first class post was on time.

"Royal Mail let its customers down, and these fines should serve as a reminder that we'll take action when companies fall short," said Gaucho Rasmussen, Ofcom's director of investigations and enforcement.

The watchdog also found that the company increased its price for second class stamps by 1p to 61p seven days ahead of the official cap being lifted.

Royal Mail estimates it overcharged people by £60,000 "which it is unable to refund".

Royal Mail admitted it had made a mistake and donated the sum to the charity Action for Children.

"We worked with Ofcom throughout this investigation and lessons have been learned by us during this process," it said.

Earlier this year, Royal Mail lifted the price of a first class stamp which now costs 11p more than second class postage.

The price of a first class stamp for regular letters rose 6p to 76p and second-class went up by 4p to 65p.

The 65p second-class stamp is the maximum under an Ofcom price cap.

Commenting in the current financial year, Royal Mail said it would be on course to hit the 93% first class delivery target if it hadn't been for the coronavirus outbreak.

"Despite our best endeavours, some areas of the UK experienced a reduction in service levels during March," it said.

"Relevant factors included high levels of coronavirus-related absences and necessary social distancing measures."

Last month Royal Mail said it will cut 2,000 management jobs as it struggles to deal with the effects of the coronavirus crisis.

The cuts, equal to around a fifth of the company's management roles, aim to save about £130m in costs from next year.

Royal Mail said the pandemic accelerated the trend of more parcels and fewer letters being sent, and it had not adapted quickly enough to that.