Australia Post will deliver an estimated $2.9 million in compensation to thousands of customers for lost or damaged parcels.

The consumer watchdog has accepted a court-enforceable undertaking from Australia Post and StarTrack to provide compensation for lost or damaged parcels to about 10,500 business contract customers and fewer than 1000 StarTrack delivery recipients.

Over a four-year span, Australia Post Group failed to accept some compensation requests from business contract customers for lost and damaged items.

It incorrectly told business contract customers they weren’t eligible for compensation.

Under Australian law, consumers can request a remedy if a product is not of acceptable quality or a service is not performed with due care and skill, fit for purpose or supplied within a reasonable time.

Certain transport services for the purpose of a business were exempted but that was changed in October 2018, guaranteeing the rights applied to the transport of goods to a recipient not carrying out a business linked to the goods.

The Australian Competition and Consumer Commission said Australia Post did not correctly apply the amended exemption, before the company reported the breach in May 2023.

“The failure by Australia Post Group to provide business customers with the remedies they were entitled to is extremely concerning, but we acknowledge that Australia Post self-reported this conduct to the ACCC,” commissioner Liza Carver said on Tuesday.

“We are pleased that Australia Post Group has undertaken to provide compensation for this error and to put systems in place to ensure similar errors are not made in the future.”

Australia Post will contact affected business contract customers and StarTrack delivery recipients with instructions on how to lodge a claim.

They will have six months to submit a claim after being contacted.

Compensation could include a credit to their Australia Post account, a payment to a nominated bank account or a cheque.

-AAP