ROYAL MAIL SCHEME FOR FRANKING LETTERS AND PARCELS 2008

Royal Mail, by virtue of the powers conferred on it by section 89 of the Postal Services Act 2000 and all other relevant enabling powers, hereby makes the following Scheme.

1. APPLICATION, COMMENCEMENT, REVOCATION AND CITATION

1.1 This Scheme sets out Royal Mail’s terms and conditions applicable to the franking of Letters and parcels for posting in the United Kingdom and to the posting of franked Letters and parcels and this Scheme forms part of each Licence issued.

1.2 This Scheme is made by Royal Mail under section 89 of Postal Services Act 2000. This Scheme shall come into operation on 7th April, 2008 and may be cited as the Royal Mail Scheme for Franking Letters and Parcels 2008 and supersedes in its entirety from that date the Successor Postal Services Company Scheme for Franking Letters and Parcels 2001(including all amending Schemes). Licences issued under the superseded Schemes are from 7th April, 2008, subject to the provisions of this Scheme, but without prejudice to Royal Mail’s accrued rights under those Licences,

1.3 Royal Mail may amend this Scheme from time to time. Amendments will be published in the London, Edinburgh and Belfast Gazettes.

2. INTERPRETATION

2.1 The definitions of expressions used in this Scheme are set out in the Schedule to this Scheme.

2.2 References in this Scheme to the use of Franking Equipment are (except where stated or the context necessarily indicates otherwise) references to the use of Franking Equipment to indicate payment of Postage and Fees, and/or to the resetting of Franking Equipment with a view to using the equipment to indicate the payment of Postage and Fees on Letters and parcels to be posted in the United Kingdom.

3. APPROVAL OF FRANKING EQUIPMENT AND AUTHORISATION OF MANUFACTURERS, SUPPLIERS AND MAINTAINERS

3.1 Royal Mail may at its discretion approve different models of Franking Equipment, and may authorise persons to manufacture, supply, maintain or otherwise deal with Franking Equipment.

3.2 By authorising any person to manufacture, supply, maintain or otherwise deal with Franking Equipment, Royal Mail does not become a party to any customer contract for the supply, inspection, maintenance, or otherwise in relation to Franking Equipment, and does not give any warranties, whether as to quality, weight of items, or otherwise, concerning any goods or services supplied by that person.

4. GENERAL PROHIBITIONS ON USE OF FRANKING EQUIPMENT

4.1 Franking Equipment may not be used unless the equipment has been manufactured by an Authorised Manufacturer and the Model has Royal Mail’s then current approval.

4.2 Franking Equipment which has been altered or modified in any way may not be used unless that alteration or modification has been submitted by the Authorised Manufacturer to, and approved by Royal Mail.

4.3 Franking Equipment may not be used if Royal Mail withdraws approval of the Model. Whenever Royal Mail withdraws approval for a Model it will notify Users by whatsoever means it deems suitable and use of the Franking Equipment of that Model must cease within the timescales notified by Royal Mail

5. AUTHORISATION OF USERS

5.1 Franking Equipment may not be used before the User has obtained Royal Mail’s authorisation to do so. All Users must apply to Royal Mail for authorisation via an Authorised Supplier, who will either liaise with Royal Mail or direct the User to Royal Mail.

5.2 When Royal Mail has approved an application to use Franking Equipment, a Licence will be issued to the User. The issue of that Licence shall constitute authorisation for the purposes of paragraph 5.1 above. Franking Equipment may not be used before a Licence has been issued to the User or after a Licence either expires or has been terminated, nor during any period of suspension.

5.3 The provisions of this Scheme are incorporated into and form part of each Licence.

5.4 The User shall carry out all reasonable instructions given to it by Royal Mail with a view to recording details of Franking Equipment, the issue of a Licence and the identity of the User.

6. USER LICENCES

6.1 If an application for a Licence is rejected, Royal Mail will advise the applicant and / or the Authorised Supplier or Authorised Manufacturer by whatever means Royal Mail deems appropriate. The requirement for a User to obtain a Licence applies regardless of whether or not the User may have entered into a contract with Royal Mail for the provision of postal services. If a person has neither received a Licence, nor a rejection then the application has been rejected.

6.2 The Licence will include the following information and the User must notify Royal Mail of any changes within 14 days of their occurrence:

6.2. 1. the User’s name and address;

6.2.2. the address where the equipment may be used; (Note this may not be changed without Royal Mail’s prior written consent);

6.2.3. the name of the Royal Mail controlling office where the User’s records will be kept;

6.2.4. the name and number of the Model of the Franking Equipment;

6.2.5. the serial number of the Franking Equipment and/or Meter;

6.2.6. the number of the Die and / or Device (or related machine identifier);

6.3 Royal Mail may pass this information, and any amendments to it to the authorised Authorised Manufacturer, Authorised Supplier and Authorised Maintainer of the User’s Franking Equipment, so that their records will be accurate and up to date.

6.4 The Licence authorises the User to use the specified Franking Equipment at the address shown on the Licence only for the purpose of franking its own business Letters, but not Letters or other mail of any third party . The Licence does not authorise the User to use any other Franking Equipment, for which a separate Licence, or Licences must be obtained. The Franking Equipment named in the Licence must only be used by the User and may not be transferred to a third party.

6.5 The Licence may not be transferred to another person, company, business or organisation.(Note: if the Franking Equipment is sold or otherwise transferred, the Licence does not transfer with it. and the proposed new user must be informed of the need for a Licence.

6.6 If the User wishes to change any of the details shown on the Licence, for example the address, the User must make a request in writing to the Royal Mail controlling office and the Authorised Manufacturer or Authorised Supplier of the equipment. The Licence may not be changed without Royal Mail’s prior written consent.

6.7 If the User ceases permanently to use Franking Equipment, the User must notify each of the following in writing, either prior to the date of cessation, or as soon as possible afterwards:-

6.7.1 the Royal Mail controlling office

6.7.2 the authorised Authorised Manufacturer

6.7.3 the Authorised Supplier

6.7.4 the Authorised Maintainer of the equipment

7. PAYMENT OF POSTAGE AND FEES

7.1 All applicable Postage and Fees payable on Franked Letters must be prepaid, unless Royal Mail has given its prior written consent.

7.2 Franking Equipment must always show the correct amount of Postage and Fees which the User has prepaid or has agreed to pay.

7.3 The value of Postage paid indicated by the Franking Mark on any Letter must conform to the applicable rate set out in the relevant Scheme. If mail is found to be underpaid for the selected service, it will be conveyed by the selected service and except to the extent that the provisions of another Scheme apply the sender shall be charged for the difference between the payment franked and the correct amount for that service., together with an administrative charge in respect of costs incurred by Royal Mail as Royal Mail may specify from time to time.

7.4 If mail is segregated by service and second class mail is found in a first class mailing Royal Mail will treat it as first class mailing and, except to the extent that the provisions of another Scheme apply, shall charge the User for the difference between the first class mailing and the franked amount, together with an administrative charge in respect of the costs incurred by Royal Mail as Royal Mail may specify from time to time.

7.5 The usage of the Franking Equipment and any products purchased through it will be captured electronically and details of it collated by a third party and transmitted to Royal Mail for their use as appropriate.

8. RESETTING FRANKING EQUIPMENT

8.1 The manner in which the User prepays or pays Postage and Fees will depend upon the way in which the User’s Franking Equipment is set and Reset. The method of resetting will depend upon the Model of the Franking Equipment.

8.2 Franking Equipment may only be Reset in the manner specified by the Authorised Manufacturer and approved by Royal Mail. The methods set out in paragraph s 8.3 and 8.4 below, have Royal Mail’s approval.

8.3 Remote resetting may be performed by the User using codes sent on request by the Royal Mail controlling office (or other Royal Mail) office, or the supplier of the User’s Franking Equipment. Each code contains instructions to the User’s Franking Equipment to add the value of the credit paid or agreed to be paid by the User.

8.4 The codes may be sent to the User either by post, voice or electronic means to be entered onto the Franking Equipment, or they may be sent by electronic modem link direct to the Franking Equipment. When requesting a code, the User must provide any readings of the meter’s Registers which may be requested. This information should be communicated in the manner specified which may be orally or in writing, through a keypad, or electronically directly from the Franking Equipment.

8.5 The codes may only be used to Reset Franking Equipment. Each code may be used only once. Only codes specified by Royal Mail for the User’s Franking Equipment may be used.

9. OPERATION OF FRANKING EQUIPMENT

9.1 The seals on Franking Equipment must not be broken and must not be duplicated.

9.2 If a seal is broken, the User must report it to the Royal Mail controlling office immediately.

9.3 The Meter readings (as recorded on the Meter’s Registers) must be updated so they always show the correct amount of Postage and Fees that the User has prepaid and/or used. The franking Equipment must not be tampered with in any way. in particular in any way so as to alter the Meter readings.

9.4 The Franking Mark produced by the Die and Device within the Franking Equipment must always show the same value as the amount by which the registers change when the Franking Mark is produced.

10. INSPECTIONS, MAINTENANCE AND REPAIRS

10.1 Franking Equipment must be kept in good working order by the User.

10.2 The User must ensure that Franking Equipment is inspected in accordance with Royal Mail’s requirements at least once every year (or whenever Royal Mail specifies) by a Authorised Maintainer of the User’s choice who has Royal Mail’s authorisation to carry out inspections for that kind of equipment.

10.3 Maintenance and repairs by Authorised Maintainers

10.3.1 The maintenance and repair of Franking Equipment may only be undertaken by a Authorised Maintainer who has Royal Mail’s authorisation to carry out maintenance of and repairs on that Model of equipment

10.4. Royal Mail’s inspection checks:

10.4.1 A User or person in possession of Franking Equipment must provide access as and when required by royal Mail for representatives of Royal Mail to inspect its Franking Equipment at the premises where it is located.

10.5 It is the User’s responsibility to ensure that a then current Tariff Card is at all times loaded onto the Franking Equipment. Tariff Cards are available from Authorised Suppliers and Authorised Manufacturers and must be loaded in accordance with the instructions (if any) relating to them

11. FRANKING MARKS

11.1 Franking Marks may only be produced under the direction of, or with the authority of, Royal Mail.

11.2 A Franking Mark must be printed in red ink only, or in such other colour as Royal Mail may require from time to time.

11.3 A Franking Mark must be clear and complete. It must appear in the top right hand corner on the front of an envelope or wrapper of the Letter, or on an address label which is stuck to the envelope or wrapper, or in such other manner that has been approved by Royal Mail as set out in the Guidelines.

11.4 If, in Royal Mail’s judgement, a Franking Mark is not clear or complete, Royal Mail will deal with the Letter as if the sender has not paid Postage on it, as set out in the Scheme, (or contract) that Royal Mail considers to be the most appropriate

11.5 Neither a Franking Mark nor slogan may consist of numbers, words, characters, symbols, or marks which in Royal Mail’s judgement might offend Royal Mail or Post Office employees, make it embarrassing or difficult for Royal Mail to convey the Letter in the post, which might give rise to complaints from the public, or cause Royal Mail operational or technical difficulties. If such circumstances arise, Royal Mail may require the User to cease using the Franking Mark or slogan in question and the User shall do so immediately.

11.6 If a User prints a Franking Mark by mistake, the User may write to the Royal Mail controlling office to apply for a refund within 6 months of the date when the Franking Mark was printed, enclosing the franked envelopes, wrappers or other items which must total no less than £10. If Royal Mail receives all the information and evidence it requires and the amount of Postage or Fees shown by the Franking Mark is legible, Royal Mail will give the User a partial refund of the amount of Postage paid, having deducted an amount which Royal Mail considers to be reasonable to meet the administrative cost of dealing with the User’s application.

12. SLOGANS

Royal Mail reserves the right not to accept any Letter bearing a slogan which it considers does not comply with paragraph 11 above. It is recommended that Users seek advice from Royal Mail in advance of producing or ordering a slogan and liaise with Royal Mail’s controlling office.

13. POSTING FRANKED LETTERS

13.1 Franked Letters may only be posted in the area designated by the Franking Mark, unless otherwise permitted by Royal Mail.

13.2 Franked Letters must be posted on the date shown in the Franking Mark.

13.3 Franked Letters must be presented for posting in trays, bags, pouches and envelopes of a type specified by Royal Mail, according to the following requirements:

13.3.1 in trays, segregated by class and service, facing and orientated the same way. These may be posted by depositing at a designated Royal Mail office (or where this has been arranged and any collection Fees due to Royal Mail is paid) by being collected by Royal Mail, or an agent authorised to act on Royal Mail’s behalf; or

13.3.2 in bags (each labelled with the class and service paid for), segregated by class and service, in bundles of Letters facing and orientated the same way. These may be posted by depositing at a designated post office or Royal Mail office, (or where this has been arranged and any fee due to Royal Mail is paid) by being collected by Royal Mail, or an agent authorised to act on Royal Mail’s behalf; or

13.3.3 in pouches, segregated by class and service, in bundles of Letters facing and orientated the same way. These may be posted by depositing at a designated post office or Royal Mail office, in a business posting box (or where this has been arranged and any fee due to Royal Mail is paid) by being collected by a Post Office employee, or agent authorised to act on Royal Mail’s behalf; or

13.3.4. In Low Volume Posting Envelopes (a maximum of two per day) and each such envelope must be clearly marked on the outside as such, and

13.3.4.1 sealed so it does not disgorge its contents;

13.3.4.2 be of a size so it does not interfere with the processing of other mail, and

13.3.4.3 contain no more than 30 Letters; or

13.3.5 in Late Posting Envelopes ( a maximum of one per day) posted after the last collection from the User for that day and where possible letters should be impressed with the following day’s date and may be posted in any post box.

13.4 Variations to these conditions for presenting and posting Franked Letters may be authorised at Royal Mail’s discretion.

13.5 Letters that Royal Mail are unable to deliver may be destroyed if they do not bear a return address within the United Kingdom.

14. REFUSAL AND RETURN OF LETTERS, AND REMOVAL OF DIES AND DEVICES

14.1 Royal Mail has the right-to refuse to accept and /or return Letters or other items which have been franked and/or to remove of any Die and / or Device.

14.2 Royal Mail may take any of the steps set out in 14.1 above in any of the following circumstances:

14.2.1 failure to comply with any provision of any Scheme;

14.2.2 if any of the circumstances set out in paragraph 15 occur;

14.2.3 if the User’s Licence has been suspended or terminated; or

14.2.4 if Royal Mail withdraws approval from the Model of Franking Equipment.

14.3 The User shall procure for Royal Mail and its agents entry into premises where the Franking Equipment is located and access to it and facilities for the removal of the Franking Equipment or any part of it and the right so to do in circumstances where any of paragraph 14 and 15 of this licence apply.

15. TERMINATION OF A LICENCE

Termination upon written notice

15.1 Royal Mail may terminate a Licence, at any time by giving the User not less than 14 days’ advance notice in writing.

15.2 Whenever Royal Mail withdraws approval for a Model of Franking Equipment, then the Licence in respect of it shall terminate in accordance with the notice given to the User by Royal Mail.

Immediate termination

15.3 Royal Mail may terminate a User’s Licence, with immediate effect by giving notice to the User in any of the following circumstances;

15.3.1. if, in Royal Mail’s judgement, the User has not complied with any condition in any of the Schemes;

15.3.2 if, in Royal Mail’s judgement, the User’s Franking Equipment is not in good working order;

15.3.3 if, in Royal Mail’s judgement, the User has misused any Franking Equipment;

15.3.4 if, in Royal Mail’s judgement, the User has used their Franking Equipment to print or stamp a Franking Mark which causes operational or technical difficulties or inconvenience or embarrassment to Royal Mail or to Post Office employees generally, or to the public;

15.3.5 Royal Mail returns or refuses to accept the User’s Letters, in accordance with paragraph 14; or

15.3.6 if Royal Mail receives notification from the Authorised Supplier that any of the the Dies and/ or Devices have been removed from the Franking Equipment, then the Licence shall be deemed to have terminated upon first such removal.

15.3.7 the User fails to comply with its obligations under paragraph 10. 5

15.3.8 if the User becomes bankrupt or insolvent;

15.3.9 If a receiver or administrative receiver is appointed over all or part of the property of the User or an administration order is made in respect of the User

15.3.10 if a liquidator, receiver, administrator, trustee, manager, supervisor or similar officer is appointed in relation to any of the User’s property, (or any application to appoint any of the foregoing is made)

15.3.11 if the User makes any arrangement with creditors

15.3.12 if, in Scotland, the User becomes insolvent or bankrupt or an action for the User’s sequestration is commenced, or if there is a legal action to seize the User’s property, or if the User sets up a trust deed for the User’s creditors;

15.3.13 if the User ceases trading;

15.3.14 if an order or resolution is or could be made to wind up the User’s business;

15.3.15 if the User’s partnership is dissolved;

15.3.16 if the User dies;

15.3.17 if the User is found guilty of any fraudulent misuse of the User’s or any other Franking Equipment, or is found guilty of any other theft or fraud relating to the posting of Letters.

15.4 Royal Mail may, at its discretion and without prejudice to its other rights and remedies suspend a User’s Licence, if it considers that the User has not acted in accordance with any of the provisions of the Licence.

15.5 The User or a representative of the User must notify Royal Mail immediately if any of the circumstances listed in this clause 15 occur.

15.6 Any sum credited to the User’s account shall not be refunded upon withdrawal of the User’s authorisation, or termination of a User’s Licence except where paragraphs 15.7 below applies.

Withdrawal of authorisation - at User’s option

15.7 If the User ceases permanently to use Franking Equipment the User must notify Royal Mail, specifying the date of cessation and upon that date the User’s Licence shall terminate. If the User fails to specify the date of cessation the Licence shall terminate on the date when Royal Mail receives the User’s notification.

15.8 Termination General

In the circumstances where 15.7 applies the value of any Postage or Fees which the User has paid for and not used will be refunded, after Royal Mail has verified the readings of the Registers and provided that the User is not been in breach of any provision of the Licence.

16. USER ADDRESS FOR COMMUNICATIONS

Royal Mail will use the address shown on the User’s record card/Licence for the purpose of sending notices under this Scheme.

Schedule

Definitions of expressions used in this Scheme

The Interpretation Act 1978 applies for the interpretation of this Scheme and for this purpose the Scheme is to be treated as if it were an Act of Parliament.

Any reference in this Scheme to any enactment, regulation or Scheme shall be construed as a reference to that enactment, regulation or Scheme as subsequently amended, re-enacted or replaced.

A reference in this Scheme to a scheme made under Section 28 of the Post Office Act 1969 shall, unless the context otherwise requires, be read as including a reference to a scheme made, or treated by virtue of the Postal Services Act 2000 ( Commencement No.4 and Transitional and Savings Provisions) Order 2001 as made under Section 89 of the Postal Services Act 2000.

In this Scheme, the following expressions have the following meanings, unless the context in which the expressions appear indicates otherwise.

Authorised Maintainer

A person who has Royal Mail’s approval to provide inspection and maintenance services for specified designs of Franking Equipment and systems. (Maintenance services include servicing and repairs).

Authorised Manufacturer

A person who has Royal Mail’s approval to manufacture Franking Equipment.

Authorised Supplier

A person who has Royal Mail’s approval to supply Franking Equipment.

Royal Mail Controlling Office

Royal Mail office at which records are kept of the User’s Franking Equipment.

Dies and / or Devices

The component or components of the Franking Equipment which prints, or controls the printing of the Franking Mark.

Franking

The stamping or printing of a mark or impression the ‘Franking Mark’ on the envelope or outer wrapper of a Letter to indicate the Postage and/or fee which has been paid on that Letter.

Franked Letter

Any Letter bearing a Franking Mark.

Franking Equipment

Any piece of equipment which may be used to indicate and record payment of Postage and/or Fees on Letters, including but not limited to machines, computers, computer peripherals, security devices, software, printers and telecommunications links and including any system used to reset such equipment.

Franking Mark

Any mark or impression printed or otherwise made by Franking Equipment indicating the date and place of posting, the Postage and Fees paid or payable, the identity of the Franking Equipment used and any other numbers, words, characters, symbols or marks required by Royal Mail.

Letter

Any postal packet (including letters and parcels) except a packet consisting of articles for the blind, a current registered newspaper, an unaddressed packet or packet consisting of a petition or address of a kind referred to in Section 84 (1) of the Post Offices Act 1969, or Section 100(1) to (3) of the Postal Services Act 2000.

Guidelines

Guidelines issued by Royal Mail from time to time identified as relating to the Royal Mail Scheme for Franking Letters and Parcels 2008.

Licence

A licence issued by Royal Mail authorising the User to use Franking Equipment.

Meter/Postal Security Device

The part of the Franking Equipment that records usage.

Model

The generic type, make or Model of Franking Equipment.

Postage : Fees

Postage is the fee charged by Royal Mail for delivery of a Letter. Fees are the sums Royal Mail charges to provide other services.

Scheme

Any Scheme made under either section 28 of Post Office Act 1969 or section 89 of the Postal Services Act 2000.

Registers

Instruments within the Meter of the Franking Equipment which record the amount of Postage paid and the amount of credit remaining available for use.

Reset

To charge Franking Equipment with credit for payment of Postage and/or Fees. The term resetting should be construed accordingly.

Royal Mail

A company incorporated in England and Wales with company number 4138203 and whose name is currently Royal Mail Group Limited.

Slogan

A design or wording commissioned by the User, to be printed on Letters in addition to the Franking Mark.

User

Any person who uses or intends to use Franking Equipment to pay Postage and/or Fees on Letters to be posted in the UK.

Low Volume Envelope

An envelope in a format approved by Royal Mail, obtainable from Authorised Manufacturers enabling customers of low volume franking machines (models specified and approved by Royal Mail) to post their mail as provided for in paragraph 13.3.4.

Late Posting Envelope

An envelope in a format approved by Royal Mail, obtainable from Authorised Manufacturers nabling customers to post franked mail after the last collection as provided for in paragraph 13.3.5.

Data Collection

The collection of product specific data based upon daily usage of Royal Mail products by franking customers

Tariff Card

An electronically programmed device designed to be inserted into Franking Equipment in accordance with instructions given to the User.

© Royal Mail Group Limited