• The changes approved by Postcomm today better reflect the way people use our service now
• They are a step towards creating a more level playing field between Royal Mail and other delivery companies
• Royal Mail now awaits the outcome of an Ofcom consultation on whether there will be continued regulation of Royal Mail and, if so, to what extent

The changes approved by Postcomm today include:
• Amending compensation arrangements for business contract customers. This brings Royal Mail more in line with the delivery market. The change will not affect consumers or the vast majority of small business customers who use stamped and franked mail and parcels
• Reducing the claim period for loss or damage from 12 months to 80 calendar days after the date of posting. Two thirds of consumer claims are already made within two months and 90 per cent within three months. In the wider delivery market, customers have 28 days to make a claim for compensation
• Piloting of a scheme in which items that are too big for the letterbox or require a signature can be delivered to a neighbouring address if no-one is at home. Royal Mail is the only delivery company that is not allowed to deliver to a neighbour as part of its standard practice. The overwhelming majority of customers support the initiative

The changes are part of a process of bringing Royal Mail’s terms and conditions more in line with other delivery companies. Royal Mail will continue to provide a high level of service with minimum standards that are among the highest in Europe.

The regulator’s decisions – available at www.psc.gov.uk - are a step towards lifting some of the many restrictions that Royal Mail faces but which other companies do not. Royal Mail now awaits the outcome of an Ofcom consultation on the future regulation of Royal Mail.

Stephen Agar, Royal Mail’s Director of Regulated Business, said: “The changes that have been approved better reflect today’s market. They are a step in towards creating a more level playing field between Royal Mail and other delivery companies. Royal Mail now awaits the outcome of an Ofcom consultation on future regulation of our company.”

Changes to compensation for business contract customers
Postcomm has approved Royal Mail’s application to change its compensation arrangements for business contract customers. Royal Mail is now finalising its plans for implementing the change and will communicate with customers in due course. The change means compensation will no longer be available for loss or damage to postal items sent using untracked services such as Mailsort or Packetpost. None of the major UK delivery companies provide large businesses with compensation for loss or damage for untracked delivery services.

These changes will not affect consumers or the vast majority of small business customers who use stamped and franked mail and parcels. Royal Mail made the application to make changes because:
 Current compensation arrangements are not in tune with the reality of today’s market
 Customers increasingly want tracked services. Royal Mail has invested heavily in these services to meet the changing market demands. The improved range of delivery services Royal Mail offers enables customers to choose the right service to meet their needs for speed, tracking and compensation

Changes to compensation claim period for businesses and consumers
Postcomm has approved Royal Mail’s application to reduce its compensation claim period. Businesses and consumers can currently claim for loss or damage of postal items up to 12 months after an item was sent. It is extremely difficult for Royal Mail to investigate a claim so long after the item was posted.

Approximately 67 per cent of social customers claim compensation within two months of posting; 90 per cent claim within three months. Royal Mail is now finalising its plans for implementing the change and will communicate with customers in due course. The change will reduce the claims period to 80 calendar days after the date of sending.

Delivering undeliverable items to a neighbour
Approval has been given by Postcomm for Royal Mail to pilot an initiative to make it easier for customers who are not at home to receive items that require a signature or are too large to go through the letterbox. Royal Mail is the only delivery company that is not allowed to deliver to a neighbour as part of its standard practice.

Independent research by Tpoll on behalf of Royal Mail has revealed that the overwhelming majority of consumers would welcome the initiative. The study found that 91.55 per cent of people supported the delivery of undeliverable items to neighbour if they had the ability to opt out. Less than four per cent were not in favour of the initiative. 

Royal Mail is now finalising plans for the pilot and more detail will follow in due course. Customers in pilot areas will be informed of the initiative and given the opportunity to opt out of the delivery to neighbour scheme. The pilot will include Recorded Signed For™ letters which require a signature on delivery but Special Delivery™ mail is not part of the pilot scheme. 

Ends

For further information contact:
James Eadie
Head of PR
Royal Mail Group
020 7250 2468
07850 757271
james.r.eadie@royalmail.com

Notes to editors:

1 - About Royal Mail
Royal Mail delivers 62 million items to almost 29 million UK addresses every working day. Royal Mail collects mail from 115,271 post boxes – often more than once a day – as well as from approximately 11,800 Post Offices and more than 80,000 businesses.

In the financial year 2010-11, the UK Letters & Parcels and International business lost £120 million. This is just over £2 million a week.

2 - Further changes
The regulator has also given Royal Mail permission to:
 Introduce a standard holding period of 18 days at delivery offices for items that cannot be delivered to the address on the day of delivery because no one was at home. Currently, Recorded Signed For™ items are held for seven days. Royal Mail Tracked® items are held for 14 days and all other items for 21 days. If an item is not claimed in this time, it is returned to the sender where possible. Introducing a standard holding period will simplify the system for our customers
 Reduce the time period within which customers can ask Royal Mail Customer Services for proof of delivery of a Special Delivery™ or Recorded Signed For™ item to three months. Currently customers can request proof of delivery up to 12 months after posting. Customers will still be able to get proof of delivery from the Royal Mail website after the three month period
 Reduce the time period within which customers can claim a fee refund if we fail to provide proof of delivery for Special Delivery™ or Recorded Signed For™ items from 12 months to three months
 Remove the ability for customers buying services on account to receive compensation payments by cheque. Instead payment will be made directly into a customer’s account

Royal Mail is now finalising its plans for implementing these changes and will communicate with customers in due course.

3 -Proposed changes to compensation for business contract customers:
 No change to the compensation amounts available for consumers or small businesses that send stamped and franked mail is proposed
 Currently business customers can claim up to 100 times the value of a First Class stamp (£46) in cases where an untracked letter or parcel is lost or damaged
 Compensation for Royal Mail Tracked® services is currently up to 100 times the value of a First Class stamp (£46)
 Customers who send higher value items can continue to use the Special Delivery™ service, where compensation of up to £500 is available as part of the basic price. Enhanced compensation of up to £2,500 is available for an additional fee
 None of the proposed changes are relevant to Parcelforce Worldwide. It is not regulated in the same way
 This application does not affect the delay compensation scheme linked to Royal Mail’s quality of service performance in place for bulk mail customers
 This application does not affect the compensation scheme for businesses that use Royal Mail’s delivery service through a downstream access agreement
 The claims period for international items will remain at six months