Next Day Air Overnight False Delivery Claims Leave UPS Facing $25 Million Settlement
According to a recent article at USA Today, United Parcel Service (UPS) will pay in excess of $25 million to settle claims that the package-delivery giant submitted false claims to the federal government in connection with Next Day Air overnight package deliveries for a 10-year period spanning 2004 to 2014.
UPS has contracts with the U.S. Transportation Command and General Services Administration, and provides hundreds of federal agencies with delivery services under these contracts, one of which supports DOD (Department of Defense) agencies. Federal officials claim that under these contracts, UPS guaranteed packages would be delivered by specified times the next day, although the company failed to meet those guarantees and even concealed its repeated failures.
Federal prosecutors claim that because of UPS' deception, government customers were prevented from seeking the refunds they were entitled to for late deliveries. UPS is accused by government officials of making it appear as though shipments had been delivered as guaranteed (on time) by recording inaccurate delivery times on packages. In addition, personnel at the shipping giant also allegedly used exception codes as excuses for the late deliveries which did not apply, including "business closed," "customer not in," "security delay," and other codes. Federal officials also allege that UPS provided the federal government with performance data under the delivery contracts, data that was inaccurate in terms of "on-time" deliveries.
While UPS does not agree with the government's position on its Next Day Air Overnight delivery service, it negotiated a settlement in order to "avoid lengthy and costly litigation." UPS will pay $25 million to the Department of Justice and $740,000 to the state of New Jersey, although company officials did not acknowledge any liability in the settlement.
In a statement, UPS said that it values relationships with all customers and "continues to be a valued supplier in good standing with the federal and state government." Acting inspector general of the General Services Administration Robert Erickson said in the article that, "The United States should get what it pays for, nothing less."
Robert Fulk, a former UPS employee, filed the lawsuit in Virginia federal court; he will receive $3.75 million according to government officials. The lawsuit was filed under the whistle-blower provision of the False Claims Act, which permits individuals to share a portion of the recovery in claims filed on behalf of the government.
While Parcel Audit Pros works on behalf of businesses who do substantial small parcel shipping using freight carriers such as UPS and FedEx, the above story is clear evidence that shippers are not always "above board." Are you entitled to a Fedex refund or UPS refund for packages delivered late, or not delivered at all? Contact our parcel auditing experts today to learn how your business may be able to recover refunds for mischarged shipments and more.