Two presort bureaus in Florida say the U.S. Postal Service fined them for Move Update errors while planning to let mailers in other parts of the country correct similar errors before it issues fines.
Direct Mail Express and Mail Processing Associates, both of Lakeland, FL, were two of nine mailers in the Southeast tested by USPS area finance teams in August 2001 to determine whether they were using Move Update properly. The test found that both companies received automation discounts as part of Move Update for mail pieces with outdated addresses that disqualified them for presorted First-Class Mail rates.
Move Update, which is designed to reduce undeliverable-as-addressed mail, gives mailers automation or presort rates provided they update addresses every 180 days with a USPS-approved method.
DME says the postal service is asking it to pay the difference between the discount rate and the single-piece rate for all its mailings during the tested period, a total of $2,748.25. MPA, which could not be reached for comment, owes $27,485.68.
“The postal service is asking us to pay the full-rate postage for every mailing that was entered on three days in August even though there may have been only one piece of mail in the mailing with an outdated address on it,” DME president Beverly Russum said.
Russum also said she is concerned because the USPS told her that it could “go back as far as a year assessing penalties on every piece of mail we've done.” She said “this threat” prompted her to hire Donald H. Smith, a lawyer from Washington-based law firm Sidley Austin Brown & Wood LLP. Smith also is representing MPA.
Smith filed a waiver Aug. 21 with Julia Lavender, USPS district manager of finance, in Tampa, FL, looking to overturn the fines. That waiver is pending. In the filing, he says 11 pieces out of 37,885 that were part of several consolidated mailings from DME had outdated addresses. Another 30 pieces in two DME mailings totaling 3,471 pieces also had outdated addresses.
Smith said the postal service identified 24 pieces with outdated addresses in consolidated mailings by MPA totaling 122,266 pieces, and “a number of mailpieces with outdated addresses in nine MPA mailings for the Polk County Taxing Authority containing 285,246 mailpieces.”
Lavender could not be reached for comment, and other USPS officials contacted did not know the number of mail pieces involved.
A spokesman for Lavender said that though he was unaware of the details of the case, “we give [companies] every opportunity to tell us their side of the story. We just want them to comply with the regulations as they said they would to get the discount and not short us out of money.” As for assessing penalties on every piece of mail in a mailing rather than those that were incorrect, the spokesman said, “if the certain mail pieces don't qualify, than the entire mailing doesn't qualify for the discount. That's the way the rules are.”
The legal fees are more than the penalty assessed so far, Russum said, but if the USPS assessed penalties on past mail, “it would have been over $250,000, and this would have put us out of business.”
The postal service will not begin testing mailers elsewhere in the country until November. Even then, it likely will give mailers a chance to correct errors before issuing penalties.
“We are going to probably work with the mailers at first to give them a chance to correct any problems that they have before we start assessing deficiencies,” said Angelo Wider, USPS manager of finance.
Earlier reports, including articles in DM News, said no penalties had been assessed during the Southeast area tests, but Wider said DME, MPA and other companies had been assessed fees.
“[These companies] were found to be in error, and corrective action was taken,” Wider said. “When I adopted it as a national review and decided to do a national rollout, we changed some of the rules. It's the nature of the beast. The Southeast identified a major problem, and the mailers that they [area finance teams] have identified just had to pay up. But in the corporate approach, we varied it a bit because it became a national initiative.”
Joel T. Thomas, executive director of the National Association of Presort Mailers, said, “If [the USPS] wanted to treat their customers right, they probably should have given them some notice. … I think it is unfair that they would get fined but [that the USPS] would tell everybody else in the nation that they get more time.”
DME and MPA are not members of the presort mailers association, Thomas said. Still, he said, the assessments of the area finance teams were not “outrageous … They didn't go out and nail somebody for one letter that was one day over the deadline. The addresses here were very old, very stale.”
Thomas said the USPS should do better at checking mail so such issues can be avoided.
“To sit back and wait and then go after this stuff and try to find out whether anybody was really doing what [they] were required to do after [the USPS] already accepted the mail is not right,” he said, “especially when they've made no effort to do so for years. But at the same time, people should know they have a requirement. Most mailers do. When customers do not pay attention to their business and do not make an effort to know what the rules are, the rest of us have to pay for their failures in our rates.”