GAO Tells USPS to Improve Monitoring of NCOA Mail

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Although the U.S. Postal Service's National Change of Address program shaved off $1.2 billion in mishandling costs associated with forwarding mail in FY98, a July 30 government report says the agency isn't doing enough to monitor the use of its files to prevent them from being misused.


The NCOA program was instituted in 1996 as a way to improve the quality of addressed mail by providing business mailers with accurate, change-of-address data that are automation compatible. The USPS collects change-of-address information reported by postal customers nationally and disseminates corrected addresses through 23 private firms licensed by the agency to provide address corrections services.


The study -- requested in November by Rep. John McHugh (R-NY), chairman of the subcommittee on the postal service -- was launched to determine what actions the agency has taken in response to a 1996 General Accounting Office report that found the NCOA was operating without clearly defined procedures.


The GAO -- the investigative arm of Congress -- recommended in its report that the USPS use special seed records inserted into a file to detect the unauthorized disclosure of NCOA data by licenses. It recommended reviewing, responding to and documenting NCOA-related complaints and inquires from postal customers and NCOA-related advertisements by licensees.


While the report found that the postal service developed and implemented written procedures addressing NCOA oversight, procedures to ensure that it is alerted when mail is sent to seed record addresses were not working. In addition, the study found that the agency did not always conduct the minimum number of licensee audits and promptly re-audit licensees that failed initial audits.


It said the postal service has taken no action to explicitly state that NCOA program-linked data are not to be used by customers of licensees to create or maintain new mover lists based on NCOA corrections to their files, and it recommended specific language in an acknowledgment form.


In a letter to the GAO in response to the report, Postmaster General William J. Henderson said the Postal Service "has neither the legal authority nor the practical ability to regulate how the owners of mailing lists may use those lists once they have been matched against the NCOA database."


He added that list owners have always been free to sort, divide or otherwise manipulate their lists to create other, more specialized lists, and because "these lists necessarily contain some corrected addresses does not diminish the fact that the lists are the property of the list owners."


He said that the USPS disagrees with the report's conclusion that federal privacy laws continue to apply to corrected addresses once they have been incorporated into the mailing lists of USPS' licensees' customers. "Without an effective way to enforce a prohibition on the creation of new movers lists -- such as sending postal inspectors into mailers' plants -- revising the acknowledgment agreement form to explicitly prohibit their use would be an empty gesture."


Henderson's said the USPS agrees with the recommendation regarding periodic audits and re-audits of licensees, and said the postal service has taken the necessary steps to measure that the required audits will be performed for each license each year.


As for alerting officials when mail is sent to seed record addresses, Henderson said the USPS is currently implementing improvements that will fully respond to the concerns written in the report.


"We have established a process where district managers are notified when postmasters or station managers do not follow correct procedures in responding to test mail pieces set by the NCOA program office to seed record addresses," he said. "We expect to complete national implementation by September 1999."
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