Court: Royal Mail Owes Bulk Mailers $87 Million

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Royal Mail has until Jan. 27 to appeal a court ruling that found it in breach of its own refund program, or it will be forced to pay more than $87 million to disgruntled bulk mailers.


Watchdog group Postwatch brought the review against industry regulator Postcomm when Royal Mail withheld refunds from companies after failing all 15 of its minimum standard service targets in 2003 and 2004. Total compensation due to bulk mailers was around $140 million.


The case represents the first time a British watchdog group succeeded in a judicial review against an industry regulator. Royal Mail is expected to appeal the ruling.


Postwatch argued that Postcomm's interpretation of a clause in the refund program let Royal Mail undercompensate bulk mail users by tens of millions. Instead of $140 million, bulk mailers were refunded around $70 million, according to Postwatch.


Royal Mail said the refund program determined by Postcomm in October 2003 allowed for Royal Mail to withhold money based on late payments. As a result, Royal Mail used late payment of invoices across the year to refuse to pay the full amount.


Postwatch brought it to Postcomm's attention, but Postcomm sided with Royal Mail. However, a judge ruled that Postwatch's interpretation was correct.


A further $17.7 million will be required to be paid to customers for breaches in 2004 and 2005, if an appeal is not made by Jan. 27.


Melissa Campanelli covers postal news, CRM and database marketing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters


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