It's David vs. Goliath in USPS Lawsuit

Share this article:
John Hightower isn't very happy with the U.S. Postal Service.


That's why Hightower, president of a small insurance company in Colorado, has created the Web site postalserviceabuse.com, sent a postcard mailing about the site and is suing the USPS over its revenue assurance program. Or, as his postcard calls the program, the "USPS Patented Revenue Generator."


The postcard features a black-and-white drawing of a postal official holding a man down and using a vacuum sweeper to suck money out of his wallet. The official says, "Heh, Heh, Love it when my postal service makes mistakes. Customers pay and pay and pay and ..." The Web site's address is written in red ink across the bottom, and on the vacuum are the words "Postal Exec. Bonus."


Hightower's company, CIGI/Consumer Insurance Group Inc., Salida, CO, mailed the postcard to 2,500 members of the Direct Marketing Association, 884 small newspapers and 1,700 small businesses earlier this month.


The revenue-assurance program has been controversial for years, with mailers complaining that postal officials unfairly demanded payment of back postage for ambiguous and inconsequential violations of the Domestic Mail Manual and didn't allow mailers appropriate due process. In 2000, the USPS Office of the Inspector General also attacked the program. Last summer, postal officials finally revised the policy and allowed for mailers to appeal any charges.


This is why USPS spokesman Gerry Krienkamp doesn't understand CIGI's complaint.


"If someone is given bad information, there is an appeals process there for customers that allows for the assessment to be waived," he said. "It's hard to gauge when this [Web site] was put up ... but he doesn't seem too well-informed."


Krienkamp did not know of any lawsuit. But CIGI's law firm, Moye, Giles, O'Keefe, Vermeire & Gorrell LLP, Denver, said it was filed in 1999 in U.S. District Court in Denver. Dozens of court proceedings have been held, but no trial date has been set because the lawsuit is still in the discovery stage. Hightower referred all questions to his attorneys.


CIGI was a regular user of Standard mail for years, sending marketing information about life insurance and other services to insurance agents. In 1997, postal officials told the company it had underpaid for bulk mailings from 1994 to 1997. In addition, the USPS tacked on additional penalties and fees. A source familiar with the case put the amount at "well over $1 million."


In a statement on the postalserviceabuse Web site, Hightower took offense to the whole notion.


"... the USPS agrees that we paid every penny the postal service stated we owed," he wrote. "And most incredible of all, the postal service states that they KNEW they were miscalculating our rates as early as 1995 and continued to miscalculate our rates for another two years. And now they want to hold us accountable and even punish us for their own incompetence."


The source also said the postal service's changes to the revenue assistance program do not dismiss CIGI's complaint. CIGI's law firm declined to comment.


Nevertheless, CIGI now markets its services using the Internet and First-Class mail.


Share this article:
You must be a registered member of Direct Marketing News to post a comment.

Sign up to our newsletters

Follow us on Twitter @dmnews

Latest Jobs:

More in News

De Quinto Tapped as Coke's Next CMO

De Quinto Tapped as Coke's Next CMO

The president of the company's Iberia Business Unit will take over from Joe Tripodi upon his retirement in February.

Customer Centricity Is Spurring Marketing-Tech Investments

Customer Centricity Is Spurring Marketing-Tech Investments

A majority of marketers rank customer satisfaction improvements as paramount in the technology investment decisions.

Big, Bold Moves in the C-Suite

Big, Bold Moves in the C-Suite ...

JCPenney appoints Home Depot's Marvin Ellison as CEO; Harte Hanks and JWT add hitting power to their C-level benches