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UPS settles complaint it shortchanged government customers

Published:Wednesday | May 20, 2015 | 5:00 AM
FileUnited Parcel Service trucks move into the UPS facility in Hodgkins, Illinois, December 15, 2006

United Parcel Service Company agreed to pay more than US$25 million to settle complaints that it kept false records to hide late deliveries of overnight packages to government customers.

The US Department of Justice said Tuesday that the payment settles a whistle-blower lawsuit filed by a former UPS employee, who will get US$3.75 million.

A UPS spokeswoman said the company still disputes the government's claim but settled the case to avoid long and expensive litigation.

The settlement does not include an admission of liability by UPS, said the spokeswoman, Susan Rosenberg. She said the company has improved training and technology since learning of the allegations.

UPS agreed to pay US$25 million to the Justice Department and US$740,000 to the state of New Jersey.

Atlanta-based UPS guaranteed delivery of overnight packages by a certain time. The whistle-blower lawsuit, filed in a federal court in Virginia, charged that from 2004 to 2014, UPS recorded incorrect delivery times to make it seem as if the packages arrived on schedule and also gave false reasons for being late.

Shares of UPS rose 69 cents to US$102.60 in morning trading.