Royal Mail could face penalties over rigged research

Allegations of research rigging came to light last year after a Royal Mail employee leaked a spreadsheet containing the details of 152 panellists to the regulator, Postcomm.

The whistleblower explained how staff had compiled the list and used it to prioritise deliveries and contact panellists to challenge their reports. In this way managers sought to distort the delivery time results, in the hope of improving their scores for service quality.

In preliminary findings from a 10-month inquiry, Postcomm said it is “minded to conclude” that Royal Mail was and still is in breach of its licence condition requiring independent monitoring and anonymous panellists. The firm has not yet demonstrated that the problems have been dealt with, Postcomm said.

Postcomm stressed that its findings “did not reveal any material difference to Royal Mail’s published quality of service figures”. It said Royal Mail had fully cooperated with the investigation, as well as conducting its own internal investigation.

The performance measurement was carried out for Royal Mail by Research International (now merged with TNS), which set up a panel of individuals and businesses to send and receive letters through the post and record delivery times.

But managers learned how to identify letters destined for members of the panel and make sure they were delivered first. The letters, which were designed to be identifiable by panellists, could be picked out by marking on the envelopes, or by feeling for the RFID tag in the corner of each envelope. In the Motherwell delivery office there was even a notice telling staff to bring to the office manager’s attention any mail addressed to a particular panellist.

The scam, which had apparently been going on “for a number of years”, involved staff at various levels in locations in the west of Scotland, and staff in Belfast, Carlisle, Kingston and Twickenham had apparently also identified panellists. Some managers referred to panellists as “key customers” and staff members described the use of the spreadsheets of panellists’ details as an “entrenched process”.

Postcomm said that Royal Mail failed to spot how easy it was for staff to identify panellists because of “significant corporate failings” in how it monitored its research. Despite being told three times by Research International in the space of a year that panellists in central Scotland had been contacted by staff, Royal Mail didn’t spot the pattern. Its methods were “narrow” and it was over-dependent on its contractors, Research International and auditor KPMG, to identify any interference, when it should have been taking responsibility for this itself, Postcomm said. Two members of Royal Mail staff have been put on “precautionary suspension” as a result of the investigation.

Following a review of Royal Mail’s research processes, PwC has recommended that the firm make test mail less conspicuous; remind staff and panellists about the importance of confidentiality; simplify how problems are reported in the organisation (including centralising the collection of data on panel performance); and codify its relationship with contractors more carefully.

Royal Mail now has the opportunity to respond to Postcomm’s findings before the regulator makes its final decision, which is not expected before May. Postcomm said it would consider possible sanctions if it decides that Royal Mail is or was in breach of its licence. The body is able to issue financial penalties of up to 10% of a licensee’s turnover – which could mean a multi-million pound fine.

Royal Mail reiterated in a statement that the investigation showed its quality of service figures were not materially affected.

A spokeswoman for TNS Research International told Research: “Although TNS Research International takes this matter extremely seriously, as the investigation is still ongoing, legal obligations unfortunately prevent us from responding at this time.”