Royal Mail faces grilling over scam letters

Royal Mail executives are to be summoned by the government following allegations that it delivered scam letters aimed at conning vulnerable people out of money.

The UK’s dominant postal service has been accused of making money from distributing mail, sent by international criminals, that defrauded victims out of large sums of cash.

Letters included messages from fake clairvoyants, prize-draw scams and illegal advertisements for unlicensed health remedies, according to claims published on Monday in an investigation by the Daily Mail.

The newspaper alleged that bogus correspondence from overseas fraudsters, deliberately targeting vulnerable and elderly people, made its way into the delivery network after being collected and sorted by Whistl, the group formerly known as TNT Post.

It reported that scammers paid companies to print letters in bulk, sent in envelopes bearing Royal Mail’s logo, and that recipients lost money after responding to fraudulent offers.

Margot James, the business minister, said: “I will be holding a meeting with Royal Mail, other postal operators and the National Trading Standards’ Scams Team to ensure this issue is tackled as a matter of urgency.”

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The revelations could prove damaging to one of the UK’s most-trusted brands.

Royal Mail said it “never knowingly handles scam mail”, and that since 2014 it had prevented 22m items from reaching UK households and businesses by terminating contracts with companies proven to be distributing scam mail.

The FTSE 100 group added that it was legally required to deliver any addressed letter and that it was against the law to open mail in transit, which would raise “serious privacy concerns”.

Fraudsters conned people out of an estimated £2.4bn using scam mail in 2011, according to the Metropolitan Police.

Privatised in 2013, Royal Mail generated £1.16bn of sales from marketing mail in the last financial year, out of total group revenue of £9.25bn. Such correspondence includes bank statements and utility bills, some of which is fed into its postal network by so-called “downstream access” providers.

Of the millions of items it handles every day, only a “tiny fraction” was scam mail, said Royal Mail.

“We have contacted Whistl and other postal companies, which submit mail into our network, and have asked them to review any suspect contracts as a matter of urgency,” it added. “We are committed to terminating contracts with companies that distribute fraudulent mail.”

Privately owned Whistl said that it paid Royal Mail roughly £550m a year to deliver bulk mail.

“Our inbound international volume is 0.6 per cent of our annual total volumes. Of course the vast majority of this inbound international traffic carried will be legal, decent and honest,” it added.

Asked whether it anticipated any compensation claims from victims, Royal Mail said it was not responsible for the content of messages sent by third parties.

The company‘s European parcels arm, GLS, was fined £40m by French regulators for price fixing along with other postal operators last year.

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