NAD Recommends US Postal Service Modify Website to Better Disclose Certain Insurance Restrictions; Postal Service Takes Steps to Do So

New York, NY – July 29, 2014 – The National Advertising Division has recommended that the United States Postal Service better disclose to consumers the restrictions that apply to the claim “$50 insurance included in Priority Mail service.” The Postal Service has taken steps to do so.

NAD is an investigative unit of the advertising industry’s system of self-regulation. It is administered by the Council of Better Business Bureaus.

NAD considered the disclosure issue pursuant to a consumer complaint. The consumer informed NAD that she had mailed a $100 gift card using the advertised service. The package was lost in the mail and when the consumer filed a complaint using the Postal Service online system, she was advised that the maximum refund would only be $15 (which she received), along with $5.05 she paid for postage. The consumer forwarded this complaint to NAD.

As part of her complaint to NAD, the consumer submitted copies of the “Add Insurance & Extra Services” Postal Service webpage as of Jan. 23, 2014, 10 days after she received the $20.05 reimbursement check from the Postal Service. The webpage relied upon by the consumer included the following reference to insurance: “$50 insurance included in Priority Mail service.** Additional coverage may be available.” The asterisks referred to this disclaimer: “Priority Mail pieces must bear a tracking barcode to quality for the included insurance.”

There was no “up to” qualification nor did the disclaimer refer to any restrictions other than the mailed item requiring a tracking barcode.

Based on the information available at the advertiser’s website at the time of the consumer’s purchase of the Priority Mail service, and absent any information in the record that would otherwise alert the consumer to restrictions that would apply to the insurance coverage for her Priority Mail package, NAD determined that the message reasonably conveyed by the webpage is that the consumer would be reimbursed $50 for her lost shipment.

NAD recommended that the advertiser modify its website and other advertising materials to:

•  More clearly and conspicuously disclose that restrictions apply to the $50 insurance accompanying items mailed using Priority Mail service
•  Reference all of the applicable sections of the UPSP “Domestic Mail Manual” (DMM) relating to exclusions or restrictions as they pertain to the $50 insurance accompanying Priority Mail
•  Hyperlink each section of the DMM mentioned in the disclosure
•  Include examples, where applicable, of what constitutes certain payable and nonpayable claims in both the DMM and the disclosure referencing the DMM, so that consumers better understand the types of products that are included.

The Postal Service, in its advertiser’s statement, said that while it did not agree that its previous site or other advertising materials were misleading with respect to the insurance coverage offered with Priority Mail, it intended to implement NAD’s recommendations.

Further, the Postal Service said, it has included a reference to “gift cards” in the insurance section of the DMM and will undertake a review of the DMM to include examples, where applicable, of what constitutes certain payable and nonpayable claims in both the DMM and the disclosure referencing the DMM so that consumers better understand the types of products that are included.

“Please bear in mind that the DMM is a Federal regulation of the Postal Service that sets forth the terms under which the Postal Service provides products and services. Making changes to the DMM can be a lengthy process. In addition to the internal review that must take place before a proposed DMM change is determined to be appropriate, the Postal Service is required by Federal law to publish a notice of changes to the DMM in the Federal Register, which provides the public with a period of time, generally no less than 30-60 days to comment on proposed DMM changes. However, we will work to have any necessary changes implemented as quickly as possible.

“In addition to updating the DMM, the Postal Service is planning to undertake an effort to make its website more consumer friendly and, as a part of that plan, publish additional documentation to explain the insurance coverage offered by the Postal Service. It is our expectation that these initiatives will provide additional, easy-to-use reference points for our customers regarding our insurance coverage as well as our other products and services.”