Uproar over PAF charging shake-up

Direct marketing companies are “up in arms” over proposed changes to the way Royal Mail charges for access to the Postcode Address File, leading to accusations that the move could devastate the industry.
Under the planned system of charging, which is still under consultation, instead of paying an annual licence, businesses will be charged between 1p and 8p every time an address is checked against PAF.
PAF is widely used throughout the DM industry, for bulk mailing and address searches for online customer form filling, and is the basis for many data companies’ address verification files.
But GI Solution’s deputy managing director Patrick Headley predicts “pandemonium” if the new system gets the green light.
Headley told PrintWeek: “We currently pay £16,000 a year for our licence, but if a company is charged 1p a record, 10m mailings would cost £100,000. This is a huge increase. This is not the way to go about promoting mail and encouraging people to use the service.
“I was speaking to a big retail customer recently and he said it will just encourage them to swap mail for email. The industry is up in arms and this will result in pandemonium. If this goes ahead it will be devastating to the industry and I can see companies going out of business. I hope Royal Mail sees sense.”
Headley claims that often a letter is checked against PAF up to five times for it to qualify for some of Royal Mail’s discount services. A mailing house that mailed 2.5 million letters a month could see monthly costs rise from between £24,000 to £200,000. These would be passed on to the customer.
British Association for Print and Communication chief executive Kathy Woodward said: “Anything that makes mailing less attractive is harmful to the industry. But coming up to privatisation I would expect them to demonstrate a growth scenario rather than do anything that negatively impacts their distribution volumes.”
But a Royal Mail spokesman rejected the accusations, saying that “the proposals aim to incentivise take up, encourage greater use of PAF and enable it to better meet the current and future needs of users and solutions developers in today’s marketplace”.
Talking to DecisionMarketing, a Royal Mail spokesman said: “In consulting on our PAF Licence proposal, Royal Mail is actively listening to how the proposed commercial and pricing models would work in practice. We want to encourage and make it easier for bureaux and mailers of all sizes who use PAF to maintain customer databases and for mailing purposes.
“We would like to reassure customers that our intention is to develop a pricing structure that meets the current and future needs of the market, whilst maintaining current revenue levels.”
The DMA is currently putting the finishing touches to its submission to the consultation.
Earlier this year, Royal Mail announced that independent “micro” businesses would get one year of free access to the file. Micro businesses are defined as those with less than a £2m annual turnover and which have between one and nine employees. Small registered charities – those with less than a £10m annual income – will also be offered open-ended free access.