UPS has agreed to a $4.2 million settlement as the delivery service overcharged clients in 14 states and three cities by falsely claiming that premium-priced, next-day packages for delivery were able to reach their destinations on schedule.
The agreement is the second one for UPS this year on such allegations, and covers accused malpractice from 2004 to 2014. UPS employees were said to have recorded false delivery times for packages sent to government customers through the next-day delivery service of UPS.
The falsified delivery times made it appear that the packages were delivered on time, despite them actually being delivered late.
The accusations also said that UPS employees allegedly applied inappropriate "exception codes," which are labels attached to the packages, making them exceptions to the next-day delivery service. The exceptions were based on falsified claims of bad weather and other such reasons.
The delivery service also falsely recorded requests for late deliveries by government agency customers, which had their next-day delivery packages delayed, and which also prevented them from claiming associated refunds.
UPS, despite agreeing to pay the settlement, did not admit to any liabilities, and remained in disagreement with the assessment of state officials. The settlement will cover thousands of offices in Delaware, California, Hawaii, Florida, Indiana, Illinois, Minnesota, Massachusetts, New Mexico, Montana, North Carolina, New York, Virginia and Tennessee and three cities namely Washington, D.C., New York, and Chicago.
"UPS improperly profited from charging New York state government entities — and ultimately our taxpayers — when its employees failed to meet its guaranteed delivery times for overnight deliveries," said Eric Schneiderman, New York Attorney General. Schneiderman's office spearheaded the multi-jurisdiction group in an investigation on the allegations against UPS that were brought to light by a former employee of the service.
Robert Fulk, the whistle-blower, will be receiving a part of the recovery, according to Schneiderman.
In a statement, UPS said that it values the relationships that it has built with the government and its agencies, and that it will continue to serve as a supplier in good standing. Upon notification of the issues, the company said that it shifted its focus on improving training, its systems and its technology to provide better service to its customers.
