LONDON (dpa-AFX) - UK Office of Communications or Ofcom Friday said it has fined Royal Mail plc (RMG.L), a provider of postal and delivery services, 1.5 million pounds for failing to meet its regulatory first-class delivery target in 2018/19.
Ofcom has also fined Royal Mail 100 thousand pounds for overcharging customers for second-class stamps between March 25 and March 31 last year. The fines will be passed on to HM Treasury.
In a statement, the UK's communications regulator noted that it requires Royal Mail to deliver at least 93% of first-class post, across the UK, within one working day of collection. In 2018/19, 91.5% of first-class post was delivered on time.
The agency said it can consider evidence submitted by Royal Mail of any exceptional circumstances, beyond the company's control, that may have explained why it missed the target by such a significant amount.
But, the company did not provide a satisfactory explanation and it did not take sufficient steps to get back on track during the year.
Ofcom noted that Royal Mail's performance improved in 2019/20, and after taking into account the impact of Covid-19, the company met its regulatory obligations.
Regarding fine for overcharging customers, the agency said it has set a price cap for second-class stamps to ensure that an affordable postal service is available to everyone, while keeping the universal service financially sustainable.
For April 1, 2018 to March 31, 2019, the cap was set at 60 pence. Royal Mail increased its price for second-class stamps to 61 pence on March 25, 2019, thereby overcharging customers for seven days until the cap increased on April 1, 2019.
The company estimated that it overcharged people by approximately 60,000 pounds in total as a result, which it is unable to refund.
The company has since made changes to its compliance processes that it says will prevent this error from happening again.
Copyright RTT News/dpa-AFX