U.S. Postal Service Fraud


The U.S. Postal Service Office of the Inspector General estimates that $1 out of every $20 paid by the Postal Service to contractors is the result of fraud. This means that $1.45 billion of postal service funds that are lost to fraud every year.
Examples of U.S. Postal Service Fraud


  • Misuse of postal service Voyager Credit Cards (cards issued to each USPS vehicle for maintenance and fuel);
  • Price fixing by air cargo carriers;
  • Mischaracterizing categories of mail in order to receive postal incentives;
  • Fraud by various other contractors, transportation networks, and information technology infrastructure providers.


Postal Incentives


The U.S. Postal Service frequently offers incentives that are geared towards increasing mail volume and revenues. Under these incentives, high-volume mailers can apply to the postal service to receive certain discounts for their mailings. However, qualification for the program is usually based on historic mail volumes and may include a requirement that future volumes exceed a certain threshold. Two such programs in 2011 were the “Reply Rides Free” incentive that gave qualifying a credit for the second ounce of mailings weighing more than one ounce and the “Saturation and High Density Mail Incentive Program” to credit qualified participants’ accounts for volumes over an established threshold.


Generally, these programs apply to companies regularly sending mass-mailings or advertisements. Since the threshold is determined based on historical mail volumes, some program participants have been motivated to submit false data. This falsification may be a decreased volume report on the front end, so that a participant’s threshold is not so high, or it may be inflated data later for participants that fail to meet the incentive threshold. Either way, submitting false data in order to be eligible for reduced mailing rates constitutes fraud.

In addition to misrepresenting the volume of mailings sent, other companies have misrepresented the nature of the mailings in order to qualify for reduced mailing rates. For example, the U.S. Postal Service offers reduced rates for certain types of mailings such a periodicals (newspapers, magazines, etc.) or advertising materials. However, in there are certain requirements which must be met in order to qualify. Publications who wish to take advantage of the reduced periodical mailing rate must send at least 50 percent of their publications to paid subscribers. This is designed to ensure that certain types of junk advertisements are not labeled as “periodicals” and mailed out at a reduced rate. There are different types of rates available for advertisers. Misrepresenting the nature of a mailing in order to qualify for a lower rate constitutes fraud.
If you think you are aware of fraud against the United States Postal Service, please contact one of our experienced attorneys at (248) 539-7420.