Consumers Face Double Whammy Of Stamp Fraud, Postal Snooping

Every year, millions of Americans purchase much-needed products online along with the required postage. While most of the sellers are legitimate operations, a not-insignificant share are willing to use counterfeit postage to save a buck on taxpayers’ and consumers’ dime. 

According to the U.S. Postal Service (USPS), “(i)n recent years, the use of counterfeit postage has increased substantially, especially on packages … it has resulted in a significant loss of revenue to the Postal Service.”

But, the USPS’ solution may be even worse than this pressing problem. Agency officials are proposing to change the rules and allow the USPS to open and dispose of mail with counterfeit postage, rather than returning to sender.

This misguided change would jeopardize consumer privacy without actually addressing the larger fraud issue. America’s mail carrier should return this bad idea to sender and embrace real reforms to end counterfeit postage.

Under the USPS’ proposed rule change, the Domestic Mail Manual would deem “counterfeit postage” as “undeliverable;” offending mail pieces “will be considered abandoned and disposed of at the discretion of the Postal Service.” The USPS would also have free rein to open this “abandoned” mail as it sees fit. While the idea is to respond brazenly to discourage counterfeit postage, the proposal does nothing for consumers eagerly awaiting their parcels.

In addition, far too much trust is placed in the hands of postal staff to look through Americans’ precious cargo without recourse.

In 2013, The New York Times homeland security correspondent Ron Dixon reported that the USPS was handing over information on mailpieces to law enforcement to spy on environmental groups. More recently, the agency has been caught spying on Americans’ social media accounts.

In April 2021, Yahoo News reported that the service runs an investigation unit known as the Internet Covert Operations Program (iCOP; since renamed the “Analytics Team”) that “involves having analysts trawl through social media sites to look for what the document describes as ‘inflammatory’ postings and then sharing that information across government agencies.” 

It’s only natural to wonder whether information from opened “abandoned” mail will find its way to law enforcement and/or the “Analytics Team.” Wanton openings and seizures can also have political ramifications. The USPS is facing legal scrutiny  for “seizing shipments of Black Lives Matter masks intended to protect demonstrators from Covid-19 during protests following the May 2020 murder of George Floyd.”

These (and other items) were seized because of external physical characteristics of the parcels, leading to the possibility that agency employees will jump the gun and open packages based on the mere suspicion of counterfeit postage. That’s a lot of power in the hands of an agency with a track record of disregarding Americans’ privacy and political beliefs. 

There are far better ways for the USPS to deal with the problem of counterfeit postage. Instead of opening the fraudulently sent mail pieces, the USPS can send them to the recipient’s post office and notify the recipient that they have “postage due” on their mail.

This way, the recipient at least has a chance to accept their parcel and pay for postage if they consider it valuable enough. The recipient could then at least try to recoup postage fees from the shady online sellers who broke the law.

More fundamentally, the agency can and must go after counterfeit postage offenders by fixing its investigative arm. The U.S. Postal Inspection Service (USPIS) has an expansive mandate and receives $500 million yearly in taxpayer money to secure the mail and sniff out fraud, but according to the inspector general, about a third of USPIS’ investigative activities “do not directly support protection of Postal Service assets, Postal Service employees, or the mail system.”

By properly targeting the USPIS’ activities, the USPS can finally get a grip on fake postage running rampant through the system. The USPS can rein in fraud while still delivering for the American people.

Ross Marchand is a non-resident fellow for the Taxpayers Protection Alliance.