UPS to pay $4 million for overcharging governments in NC, 13 other states

UPS to pay $4 million for overcharging governments in NC, 13 other states

By / State News / Wednesday, 04 November 2015 05:00

Employees allegedly cheated to meet guaranteed delivery times, failed to pay refunds

RALEIGH, N.C. - Shipping giant United Parcel Service will pay $4 million to North Carolina, 13 other states and three major cities for allegations that it overcharged government customers, Attorney General Roy Cooper said October 21st.
The payment is part of an agreement to resolve allegations that government agencies paid UPS more than they should have because some UPS employees made false claims about when packages were delivered or why they were late. As a result, thousands of state and local governments paid for next-day delivery but didn’t get it, yet were unable to get refunds for late deliveries as they should have under their contracts with UPS.
“Schemes that cheat government rip off taxpayers,” Cooper said. “Overcharging customers—whether they’re individual consumers, small businesses, or government agencies—is the wrong way to do business.”
Under the agreement, Cooper’s office will recover $49,723.81 for North Carolina.
North Carolina, the other states and cities involved in the case allege that the scheme worked as follows:
- Some UPS employees violated laws against making false claims by recording the wrong delivery times on packages sent via UPS next-day delivery services by government agencies. As a result,
packages appeared to have been delivered on time as guaranteed when they actually arrived late.
- Some UPS employees used inapplicable or inappropriate reasons to excuse late arrival of packages sent next-day delivery, including claiming packages were delayed by weather emergencies on sunny days.
In addition to the payments, under the agreement UPS will retrain employees and better monitor and report potential delivery failures or policy violations.  The settlement covers allegations of wrongdoing by UPS between 2004 and 2014.
The violations by UPS first came to light when Robert K. Fulk, a former UPS employee, filed a whistleblower lawsuit in Federal District Court in Alexandria.  Cooper’s office investigated the whistleblower’s allegations under the North Carolina False Claims Act, which bans false or fraudulent claims for payment or approval from state government. Under the law, Fulk will receive a percentage of North Carolina’s recovery in the case.
The Attorney General’s Financial Fraud Unit, which Cooper established in 2012 using funds from the National Mortgage Settlement, handled the case on behalf of North Carolina.
Source: North Carolina Department of Justice.

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