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intended to help others, and stated that the recipient was privately nominated for an
award from the fund that would help to take their life in a ‘new direction’. The misleading
impression was given that recipients would receive substantial cash awards through further
claims and advised that to receive their award they must pay a nominal and administrative
fee of £24. Those who responded to the mailings and enclosed the fee received in return
only a letter, a book and a pack of cards. The OFT has also received assurances from the
US-based company Kirkwood Advertising LLC that it will no longer distribute mailings
advertising weight loss treatment to UK consumers. The OFT expressed concerns over
potentially misleading claims for a SlimBall product claiming to assist dramatic weight loss.
Postcomm
www.postcomm.gov.uk
High Court judgment The High Court has judged that Postcomm decided reasonably and properly that a financial
25 May 2007 penalty of £1 million (originally imposed in July 2006) should be imposed on Royal Mail for
failing to take adequate steps to ensure it did not gain an unfair commercial advantage over
its competitors. Postcomm had found that Royal Mail had not put in place adequate
measures within its wholesale and retail divisions to prevent it obtaining an unfair advantage
over its competitors as stipulated in Condition 10 of its licence. It also found a failure in
compliance. The findings were not challenged in the appeal brought by Royal Mail. However,
the penalty was quashed because of a technical difficulty in its policy for calculating financial
penalties in cases where the benefit to Royal Mail and the burden on others from the
licence contravention cannot be assessed. The court held that Postcomm could not depart
from its published penalty policy in the circumstances of the case.
Bulk mail compensation Postcomm has agreed to Royal Mail’s request to suspend, until the end of the year, the
26 June 2007 payment of compensation to bulk mail customers and to ensure that the company is not
subject to a downward adjustment to its allowed revenues (known as the ‘C factor’)
where industrial action has taken place and quality of service figures have dropped. Postcomm
wishes to ensure that in the light of Royal Mail’s current financial position, including its
substantial pension deficit, the possibility of having to pay compensation and/or earning
reduced revenue in 2008 does not discourage the company from taking the steps needed
to modernise its business. Postcomm’s agreement to these suspensions is subject to
several safeguards for customers.
Zonal pricing application Postcomm is to reject Royal Mail’s application to charge large mailers who use products
23 July 2007 which are not part of the universal service different prices, depending on where in the
United Kingdom their mail is delivered. Royal Mail calls this zonal pricing.
TELECOMMUNICATIONS
Office of Fair Trading
www.oft.gov.uk
Interactive scams guides The OFT has produced a series of interactive scams guides to assist people in avoiding
80/07 7 June 2007 being tricked into losing money. Mass-marketed scams are an OFT priority. £3.5 billion is
lost by consumers each year and the three guides (‘Prize Draw Scam Mailing’, ‘Bogus
Lottery Mailing’, and ‘Fake Clairvoyant Mailing’) expose the tactics used by scammers.
Internet shopping The OFT has released a report into internet shopping which concludes that although the
85/07 19 June 2007 rapid growth of internet shopping has benefited both consumers and businesses, more
could be made of the many opportunities offered. The UK internet shopping market is
worth over £21.4 billion and during 2006 over 20 million consumers shopped online.
However, some shoppers could find better bargains by learning to shop more effectively
and many could do more to protect themselves online. Most consumers seem unaware
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