UPS to pay $4.2 million for false delivery claims

Package delivery giant UPS  (UPS) on Wednesday reached a $4.2 million settlement for overcharging 17 states and three local entities by falsely recording that next-day delivery packages reached their intended destinations on time.

The agreement, the Atlanta-based company's second on similar allegations this year, covers alleged wrongdoing from 2004 to 2014 in which some employees recorded inaccurate delivery times on packages that government customers sent via UPS next-day delivery services.

The changes resulted in apparent on-time arrivals of premium-priced packages, even though the deliveries were late.

UPS employees allegedly applied inapplicable or inappropriate "exception code" that excused late arrivals of next-day delivery packages based on false claims of adverse weather or other conditions. As a result, the government customers weren't able to claim refunds for the late deliveries.

The company did not acknowledge liability in the settlement and disagreed with the position of state officials. The agreement covers tens of thousands of government agencies in California, Delaware, Florida, Hawaii, Illinois, Indiana, Massachusetts, Minnesota, Montana, New Mexico, New York, North Carolina, Tennessee and Virginia, as well as three cities.

"UPS improperly profited from charging New York state government entities — and ultimately our taxpayers — when its employees failed to meet its guaranteed delivery times for overnight deliveries," said New York Attorney General Eric Schneiderman, whose office led the multi-jurisdiction group that investigated delivery allegations raised by a former UPS employee.

The whistle-blower, Robert Fulk, will receive a portion of the recovery, Schneiderman said.

"UPS continues to be a supplier in good standing with these governments and agencies and values their relationships," the company said in a statement about the settlement. "When notified of the issues, UPS focused to improve training, systems and technology to better serve our customers."

UPS to pay $25M for false delivery claims

UPS also agreed in May to a $25 million settlement with the U.S. Department of Justice and a $750,000 agreement with New Jersey about similar allegations about late deliveries of Next Day Air overnight packages. The company said it settled that case to avoid costly litigation but continued to disagree with the position of the federal and state officials.

UPS shares closed up 0.67% at $105.26.