A visit by postal inspectors taught Equifax Inc. the hard way that bypassing the mailbox in favor of a private express carrier can be a costly mistake.
The U.S. Postal Service was acting on a century-old law that gives it a monopoly on first-class mail. After auditing the company's use of private shippers like Federal Express for such "non-urgent" correspondence as routine letters and financial statements, it levied a $30,000 penalty."They requested the amount (of money) they would have collected had we used the Postal Service," said Dave Mooney, spokesman for the Atlanta-based credit reporting company.
The authority to conduct such audits is a relatively unknown and rarely used power of the Postal Service. But anyone who bypasses the mails for routine items such as letters and financial statements is subject to an inspection and, possibly, prosecution.
The law was enacted long before overnight shippers were even imagined but was revised in 1974 to reflect their emergence and clarify the government's definition of a letter.
The majority of U.S. companies probably violate the law routinely out of simple ignorance. The Postal Service says the most common violation occurs when businesses bundle items going to one address.
The audits are "a classic example of government intrusion," said Sen. Paul Coverdell, R-Ga. He recently introduced legislation that would prevent the Postal Service from penalizing anyone who uses a private carrier.
"I have spoken to any number of audiences and asked how many use Federal Express and virtually 90 percent raise their hand," Coverdell said. "Then I ask, `Do you know it has to be urgent or you're subject to an audit?' Well, they're just stunned."
Coverdell's bill has been assigned to the Senate Governmental Affairs Committee.
The Postal Service says the inspections are not only legal, they're also necessary.
"The Postal Service was established to give universal service to everybody at the same rate, whether you're in the bush country of Alaska or the bottom of the Grand Canyon," said spokesman Paul Griffo. "In order to provide that service you can't have people skimming off lucrative areas of our revenue."
Federal Express, based in Memphis, Tenn., and a leading player in the express delivery service, considers the audits a form of bullying.
"It's simply unfair for a quasi-governmental agency to send its police to your office and say what service you can use," said A. Doyle Cloud Jr., vice president for regulatory and governmental affairs at Federal Express. "When you're faced with a policeman, you basically do what he says."