Big Brother is Watching-direct mailers beware, you are not safe even when postage is paid

PostCom’s general counsel has communicated the following to the association:
The United States Postal Service, which appears headed for a multi-billion dollar loss this year, has quietly launched a major new initiative to collect more postage from mail that already has been paid for and delivered.

The primary targets of the initiative are business mailers—the mailers that use large volumes of First-Class and Standard Mail for marketing, billing, account statements, and other customer communications and the mail service providers that help prepare these mailings.

The Postal Service’s strategy is to investigate recent mailings for violations of the complex and arcane mail preparation requirements for discounted postage rates. Evidence of violation can lead to demands for additional postage, or enforcement actions under the False Claims Act. The potential financial exposure for big national mailers can be seven or eight figures.

The Postal Service seems to be looking for violations of Move Update (address updating) requirements, other addressing requirements, and other mail preparation and content requirements that could lead to large revenue deficiencies. In some cases, the investigators seek evidence that the mailer entered improper mailings knowingly or intentionally, states of mind that can support a claim under the False Claims Act.

Violation of the False Claims Act can expose a mailer to double or treble damages—i.e., liability equal to two or three times the amount of the underlying revenue deficiency—as well as civil penalties of approximately $11,000 per violation. The Postal Service typically rules that each mailing statement constitutes a separate violation; hence, total civil penalties sometimes can be ten or more times the underlying revenue deficiency. Criminal liability under the False Claims Act is also possible, but unlikely except in extreme cases. The firm has provided tips on how to deal with postal inspectors.

Tags: Advertising, Direct Mail, Direct Marketing, direct marketing association, junk mail, Letters, Mailing, mailing services, Money, move update, Move Update Requirements, National Change of Address, NCOA, new postal regs, non profits direct mail, Philadelphia Post Office, Postage, postage increase, postmaster, Savings

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