UPS Will Pay Fine for Overcharging Government Customers, NC to Receive Nearly $50,000

UPS Will Pay Fine for Overcharging Government Customers, NC to Receive Nearly $50,000

October 23, 2015

Shipping giant UPS will pay $4 million to North Carolina, 13 other states and three major cities for allegations that it overcharged government customers.

The payment is part of an agreement to resolve allegations that government agencies paid UPS more than they should have because some 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.

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 also 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.

Under the agreement, the North Carolina Attorney General's Office will recover about $49,700 for North Carolina.

In addition to the payments, 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. Attorney General Roy Cooper's office investigated the 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.