UPS agrees to pay $4M to settle late-delivery probe

October 21, 2015

The mystery of the late package has been solved, and United Parcel Service Inc. is going to pay the detectives.

The world’s largest package delivery company agreed to pay $4 million to resolve claims by 14 states and three cities that its employees recorded inaccurate times for next-day shipping services, New York Attorney General Eric Schneiderman said Wednesday in a statement. The settlement followed a similar $25 million agreement the delivery company reached with the U.S. Justice Department in May.

Federal, state and local agencies alleged that the Atlanta-based company submitted claims for premium-priced next day services even though shipments didn’t arrive on time. The agencies alleged company employees either faked times or inappropriately applied certain exemption codes, such as “adverse weather” when conditions were sunny, to excuse late deliveries.

“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,” Schneiderman said. “Corporations that improperly profit at the expense of taxpayers will be held to account.”

The settlements, covering deliveries from 2004 to 2014, were reached after a former UPS worker, Robert K. Fulk, filed a whistle-blower lawsuit in federal court in Alexandria, Virginia. Fulk received $3.75 million as part of the federal accord.

UPS provides delivery services to hundreds of federal agencies and thousands of state and local governments. The company has instituted remedial training and monitoring to prevent future delivery problems, Schneiderman said.

The company continues to be “in good standing with these governments and agencies and values their relationships,” a UPS spokeswoman, Susan Rosenberg, said in a statement.

States that joined New York in pursuing late-package claims are California, Delaware, Florida, Hawaii, Illinois, Indiana, Massachusetts, Minnesota, Montana, New Mexico, North Carolina, Tennessee and Virginia. New York City, Chicago and the District of Columbia also participated in the accord.


Recent Articles by Bloomberg News