UPS settles complaint it shortchanged government customers

AP News
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Posted: May 19, 2015 11:48 AM

ATLANTA (AP) — United Parcel Service Co. agreed to pay more than $25 million to settle complaints that it kept false records to hide late deliveries of overnight packages to government customers.

The Department of Justice said Tuesday that the payment settles a whistleblower lawsuit filed by a former UPS employee, who will get $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 $25 million to the Justice Department and $740,000 to the state of New Jersey.

Atlanta-based UPS guaranteed delivery of overnight packages by a certain time. The whistleblower 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 $102.60 in morning trading. They began the day down 8 percent in 2015.