Shipping Giant UPS to Pay $4 Million to Settle Claims of Overcharging Government Customers for Delivery Services
Massachusetts to Receive More than $180,000 in Multistate Settlement
BOSTON – United Parcel Service, the world’s largest package delivery company, has agreed to pay $4 million in a multistate settlement stemming from allegations that its employees falsified records relating to next-day delivery services for government customers, Attorney General Maura Healey announced today.
The alleged deceptive practices by certain UPS employees, for packages sent through next-day delivery services, resulted in premium-priced packages that appeared to be delivered by their guaranteed commitment times when, in fact, they were not.
“We allege this company improperly profited off of Massachusetts taxpayers for more than a decade by recording inaccurate overnight delivery times for government services,” AG Healey said. “Today’s settlement will correct this unlawful conduct and ensure compliance moving forward.”
The settlement agreement, joined by 13 other attorneys general and three cities, also resolves allegations that, from 2004 to 2014, UPS employees applied inapplicable or inappropriate “exception codes” to excuse late next-day packages – including claims of “adverse weather” interfering with on-time deliveries when in fact conditions were sunny. As a result, the government customers were unable to claim or receive refunds for the late deliveries under the terms of their contracts.
Today’s settlement resulted from a lawsuit by a whistleblower, or “relator” under the False Claims Act. Under the terms of the agreement, UPS will pay Massachusetts more than $180,000. As reflected in the agreement, UPS has also instituted remedial training, monitoring, and reporting compliance programs to address any potential delivery failures or policy violations.
Along with Massachusetts, the settlement was joined by the attorneys general of New York, California, Delaware, Florida, Hawaii, Illinois, Indiana, Minnesota, Montana, New Mexico, North Carolina, Tennessee, and Virginia, along with the cities of NYC, Chicago and Washington D.C.
This matter was handled by Assistant Attorney General Matthew Lyons of AG Healey’s Antitrust Division.