Post Office Will Struggle To Rebuild Brand Trust - As Boeing And Facebook Scandals Show
14th January 2024
The Post Office, once an iconic British brand has fallen from grace following the Horizon IT Scandal. With over 11,500 branches, it's the largest retail franchise network in Europe, offering a variety of products - not just postal, but cash and banking, foreign exchange and government services. Post offices are also often an important social hub for communities, not to mention offering a chance to run a vital local business for people around the UK.
The Horizon system, developed by Fujitsu, was introduced in 1999 to help branches manage transactions, accounts and stocktaking. It has since been revealed as faulty, causing account shortfalls often initially blamed on those people running the branches (known as sub-postmasters and mistresses). As a result of the system's errors, these workers were accused of fraud and theft, and wrongly prosecuted. A new ITV four-part drama has put a spotlight on the scandal, renewing pressure on the government Post Office to exonerate and compensate hundreds of former workers.
One of the UK's most trusted brands only a few years ago, the Post Office has since drawn near-universal ire for its treatment of its sub-postmasters and mistresses. The ITV show has only reignited the controversy.
Trust is crucial to the relationship brands develop with consumers. These connections help attract new customers, but also create long-term buying habits. It takes time and effort to build this kind of trust, but it can crumble in an instant, as major brands like Facebook, Boeing and Volkswagen - and now the Post Office - have found. Rebuilding this trust after a scandal takes even more time and effort and the results can be mixed.
Brand trust is multifaceted but can be thought of as the confidence, reliability and credibility that consumers and other stakeholders - such as investors, suppliers, employees and even competitors - associate with a brand. It reflects the belief that a brand is competent, consistent, honest and takes responsibility for delivering on its promises and acting in the best interest of consumers.
People can develop strong emotional attachments to brands and trust is typically at the core of these relationships. Trust underpins people's commitment and loyalty to a brand. And when a brand earns people's trust, it can be rewarded with more sales, positive word of mouth, and long-term custom, according to research. Academic studies also show the importance of trust to corporate reputation.
From hero to zero
So, when this trust is broken, it can be highly damaging for a brand, as big names have found in the past.
In 2018, social media platform Facebook was at the centre of a major data breach. Governments around the world questioned the company's commitment to data privacy after 87 million users were confirmed to have had their personal data shared with Cambridge Analytica. The political consultant was using the data to target voters during the 2016 US presidential election.
Facebook founder and CEO Mark Zuckerberg apologised in a Facebook post acknowledging "a breach of trust between Facebook and the people who share their data with us and expect us to protect it". But his initial response - deafening silence for five days - probably didn't help shore up consumer trust in the brand.
The scandal had huge implications for data privacy and governments acted swiftly to pass laws and regulations to protect consumers, including the EU's Digital Services Act. In the aftermath of scandal, Americans were also less likely to trust Facebook.
More recently, aeroplane maker Boeing's reputation for quality has been decimated. First, a damning Netflix documentary examined the 2018 and 2019 crashes of two 737-MAX jets and the company's choices about passenger safety. Boeing spent four years rebuilding trust after the two fatal crashes. But the recent mid-air cabin panel blow out of a 737 MAX 9 has seen Boeing hit the headlines again, further damaging the company image and leaving customers, pilots, crew and regulators asking why they should trust the company.
At an all-staff meeting shortly after the incident, CEO Dave Calhoun told employees that Boeing must acknowledge "our mistake" and has promised total transparency. A video of his opening statement was also posted on the company website.
Volkswagen experienced similar trust issues after a scandal dubbed "emissionsgate" or "the diesel dupe". The car company is still struggling after the US environmental regulator accused the company of cheating on vehicle emissions tests. Customers lost trust in the brand and the company, after admitting fault, also had to pay billions of dollars in fines and compensation claims.
"Our most important task in 2016 is to win back trust," Volkswagen CEO Matthias Mueller said in a January 2016 speech at an auto industry event.
Rebuilding trust in a brand
In the aftermath of a brand crisis, communication in the form of this kind of brand apology is key. But Boeing is still being accused of doing crisis management "all wrong", and Facebook has also been criticised for its scandal response.
The speed of the response matters. An effective crisis management approach typically involves company leaders issuing swift public statements - often filmed - acknowledging responsibility and full transparency about the mistakes that lead to the scandal and the remedial steps.
Trust can be rebuilt but it's a long-term process. Some companies such as Starbucks and Gucci have successfully repositioned their brands to alter the perceived image held by consumers. This involves changing marketing elements such as prices or promotional methods to attract new customers and refresh the brand image. In some cases, it involves a complete rebrand with a new logo and tagline.
The latest headlines have reignited debate about what the Post Office and the government should do to address the Horizon IT scandal. The Post Office must find the right kind of crisis management strategy if it wants to weather this storm and regain its position as a trusted British brand.
Author
Sameer Hosany
Professor of Marketing, Royal Holloway University of London
Note
This article is from The Conversation web site. To read it with inks to more information go HERE
Earlier
Following the ITV drama Mr Bates vs the Post Office, which aired on January 1 2024, UK prime minister Rishi Sunak stated he intends to introduce legislation to ensure those convicted as a result of the Post Office scandal are "swiftly exonerated and compensated".
Meanwhile, a petition calling for former Post Office boss Paula Vennells to be stripped of the CBE awarded in 2019 - for services to the Post Office - reached more than a million signatures in the days after the documentary aired.
Vennells has now handed back her CBE, saying that she "listened" to calls for her to do so. Many have questioned the decision to award the CBE at all, considering that Vennells had long been confronted with complaints and evidenced challenges to the Horizon system.
In what has been classed as one of the worst miscarriages of justice in UK history, the Post Office wrongly accused thousands of innocent people of theft, fraud, and false accounting, based on data from the flawed Horizon IT system. Hundreds were convicted, many more lost their businesses, livelihoods, and homes. The harms caused to those victimised, their families and others impacted, are vast and still ongoing.
The big question is why no one yet has been held to account and why victims are yet to be both vindicated and compensated.
Along with Dr Rebecca Helm, we are conducting a three-year research study, funded by the Economic and Social Research Council, to examine what role lawyers have played in the scandal and to explore the subpostmasters' experience of legal processes and the criminal justice system.
How has the scandal played out so far?
Problems emerged soon after the Post Office introduced the Horizon IT system to modernise transactions across the business in 1999. Horizon flagged accounting "shortfalls", which the Post Office used to take criminal proceedings and civil action against hundreds of people and terminated the contracts of thousands, of others. The "shortfalls" were in fact caused by bugs and errors in the IT system, a position which the Post Office vehemently denied for many years.
In 2012, under pressure from the campaign group Justice for Subpostmasters Alliance, Conservative politician Lord Arbuthnot and others, the Post Office retained external investigators Second Sight to explore complaints of Horizon deficiencies. But Second Sight was sacked in 2015, after it began to unearth problematic findings for the Post Office.
That same year, Vennells defended her company's handling of the concerns raised by subpostmasters. She told the Business, Energy and Industrial Strategy Select Committee, that the Post Office "was a business that genuinely cares about the people who work for us" and that there was no evidence of miscarriages of justice.
555 subpostmasters, led by Alan Bates, brought a civil case against the Post Office which exposed the failings in Horizon, and in 2019 the High Court ruled against the Post Office. This contributed to the Court of Appeal quashing the convictions of 39 former subpostmasters in April 2021.
In his judgement for the Court of Appeal, Lord Justice Holroyde found the Post Office's behaviour in undertaking criminal prosecutions had been "an affront to the conscience of the court."
More convictions have been overturned since 2021. The number now stands at 93. But many hundreds remain. Some victims have since passed away, several taking their own lives, without seeing their names cleared. And many subpostmasters are yet to come forward: around 100 more people have reportedly contacted lawyers since the drama aired.
What responsibility does Paula Vennells bear?
Vennells has apologised but has not accepted responsibility. Indeed in 2020, she sought to shift the blame to her lawyers.
The ongoing public inquiry, which was established in September 2020 and gained statutory powers in June 2021, is likely to now ask what Vennells knew about the faults with the IT system and when. She might also be asked about the advice the Post Office received in 2013 from an external lawyer, Simon Clarke. This criticised the reliability of a key witness the Post Office used in its prosecutions, though it did not come to light publicly until the Court of Appeal case in November 2020.
The evidence presented in court proceedings and to the inquiry suggests senior people in the Post Office knew of miscarriages of justice well before 2015. While the problems may have started with faulty IT, the failings in this scandal lie with the people who enabled it to happen and subsequently contained and covered it up.
Why has it taken a TV drama for the official response to ramp up?
For years, countless subpostmasters, journalists, MPs and academics have worked tirelessly to raise public awareness. The inquiry is now hearing evidence from Post Office investigators, auditors and lawyers. A further disclosure hearing is set for January 12 2024.
News coverage has included the heroic efforts of journalists Karl Flinders and Rebecca Thompson from Computer Weekly, who first broke the story in 2009. Since 2010, Nick Wallis has been reporting on the Post Office. His book, The Great Post Office Scandal and the BBC Radio 4 series, The Great Post Office Trial, have been highly instrumental.
In a December 2023 letter to Lord Chancellor Alex Chalk, the Horizon Compensation Advisory Board called for all convictions to be overturned. It further highlighted the trauma this scandal continues to inflict.
The Post Office's failures with prompt and proper evidence sharing have been an ongoing issue. It has fought exposure of the truth with such approaches as non-disclosure agreements, threats of litigation against journalists, selective reporting of investigations and litigation methods that have elicited strong criticism from the judges involved.
In what is set to be a general election year, the impact of the ITV drama has now accelerated the government's activity. To date, legal and political institutions have failed and been slow to act. But those weaknesses have also been exploited by the Post Office.
Whether this has been due to a state of denial or siege, an organisation plagued by hubris or a lack of integrity, or incompetence and impropriety by the Post Office and its legions of lawyers across 20-plus years, is an issue the inquiry will no doubt turn to.
Authors
Karen Nokes
Lecturer in Law, UCL
Richard Moorhead
Professor of Law and Professional Ethics, University of Exeter
Sally Day
Postdoctoral Research Fellow in Law, University of Exeter
This article is from The Conversation web site. To read it with links to more information go HERE
Update - Postmasters Impacted By Horizon Who May Have Been Made Bankrupt with links to earlier articles.
Earlier
Read more details in the Private Eye report
More
Justice for Sub Postmasters Alliance
Horizon Explained at Wikipedia
You can Help By Donating To Crowd funding For Justice £98,000 is needed by 1 July 2020. Every donation will help.
Computer Weekly - 28 April 2020 - Met Police assessing evidence of potential perjury in Post Office IT trials - A very good timeline of the last few years in this article.
The Register 18 December 2019 - Post Office faces potential criminal probe over Fujitsu IT system's accounting failures
The Post Office Horizon scandal is being played live on Youtube on weekdays - now at day 70
https://www.youtube.com/results?search_query=post+office+horizon+inquiry
