Questions Of Cash: Royal Mail won't pay up for lost money

Q. I sent £80 cash to my disabled father in Malaysia in November, using Royal Mail's "International Signed For" service. The package was lost. But Royal Mail refuses to compensate me, saying that cash is a prohibited item under Malaysian postal regulations. I was not made aware that I was prohibited from sending cash to Malaysia. And my letter was not confiscated by the Malaysian authorities - it was lost.
CC, Oxford.

A. Royal Mail apologises for the loss of your package, but still refuses to provide any compensation. "Unfortunately, as the contents of the letter were prohibited by the Malaysian Postal Authorities, no compensation can be offered," says a spokesman.

Postwatch supports your case, but this makes no difference as far as Royal Mail is concerned. Postwatch is an independent body, established by Act of Parliament and works alongside the industry regulator, Postcomm. Although Postwatch regards itself as an arbitrator in disputes, its findings are not binding - and in this instance Royal Mail rejects Postwatch's conclusion that it should pay compensation.

The loss of cash sent abroad is a persistent source of disagreement between Royal Mail and Postwatch. A spokeswoman for Postwatch says: "We feel very, very strongly about this. The customer has asked for the correct service, and when it goes wrong, Royal Mail says it's the customer's fault. When you read the small print, Royal Mail is right. But how does the customer know?"

Postwatch can refer cases to Postcomm where Royal Mail is in breach of its licence - but in this instance Royal Mail is not. Royal Mail's spokesman defends its right to ignore the opinion of Postwatch: "We look at each claim or inquiry individually and on its merits. What we try to do is be consistent with our stated policies and how we treat all our customers."

Royal Mail's dismissal of the recommendations of Postwatch raises serious questions about the value of the regulator.

Q. In April, I purchased from Thomas Cook £206.90 of Turkish lira at a rate of 2.03 per pound, with 420 TL supplied. On my return from North Cyprus, I took up its offer to buy back unused currency "without commission". Adisadvantageous exchange rate of 2.64 was applied and I received only £82.20 on my 217 TL, instead of the £100 I expected. The rate on offer for sterling in North Cyprus was 2.35. Thomas Cook has not replied to my request for an explanation.
AF, Gateshead.

A. Turkish lira is a weak currency, which has depreciated in value significantly against sterling over the past year. (A pound currently buys nearly 3 lira, compared with less than 2.4 lira just three months ago.) You should take special care in obtaining a good rate and minimising your holding of lira on your return from holiday.

However, your loss is mostly the result of the variations in exchange rates used by Thomas Cook. A Thomas Cook spokeswoman says: "Foreign currency rates vary on a daily basis. It is standard practice for holiday money providers to offer a lower buy-back rate than sell rate, in order to cover costs, and every customer is advised in advance of how much sterling they will gain from changing back their currency. Thomas Cook currency exchange is commission-free and its rates are competitive."

For future reference, you might ask your hotel prior to your visit whether it accepts and exchanges sterling and, if so, its exchange rate.

Q. I give my daughter £250 each month from my taxed income. This totals the £3,000 annual gift exempt from inheritance tax (IHT). Is my daughter liable to income tax on this gift?
RG, London.

A. As this is a gift, it is not liable to income tax. Tim Cook, tax partner at chartered accountant Wilder Coe says: "From an inheritance tax point of view, if the gift is regular and it is made out of excess income not capital, then it is exempt from IHT and does not form part of the £3,000 annual exemption. If the gift is made from capital, then it would not form part of the IHT annual exemption."

Q. Wanadoo refuses to cancel my contract unless I pay about £200 for a year's subscription. At my first attempt using its wireless broadband service, it became clear it was inappropriate for my requirements - I need VPN [virtual private network] access to another network via broadband connection. Wanadoo seems to be one of the few broadband providers not supporting VPN access, but this was not clear in the subscription terms when I signed up. Wanadoo insists it will continue to collect my subscription by credit card, even if I do not use its service.
JL, Littlehampton.

A. Wanadoo says VPN is a business service, which it does not support, and says this is made clear in its contract terms. As a gesture of goodwill, it is waiving its cancellation charge and minimum subscription period.

Questions of Cash cannot give individual advice. Please do not send original documents. Write to: Questions of Cash, The Independent, 191 Marsh Wall, London E14 9RS; cash@independent.co.uk.