[Federal Register Volume 82, Number 59 (Wednesday, March 29, 2017)]
[Rules and Regulations]
[Pages 15464-15467]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-06167]
[[Page 15464]]
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POSTAL SERVICE
39 CFR Part 501
Revisions to the Requirements for Authority To Manufacture and
Distribute Postage Evidencing Systems
AGENCY: Postal Service\TM\.
ACTION: Final rule.
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SUMMARY: The Postal Service is making further revisions to the rules
concerning PC postage payment methodology. This change adds
supplementary information to clarify the revenue assurance
requirements.
DATES: Effective date: August 1, 2017.
FOR FURTHER INFORMATION CONTACT: Alfred Rodriguez, Jr., Industry
Liaison, Payment Technology, U.S. Postal Service, (202) 268-5022.
SUPPLEMENTARY INFORMATION: On July 17, 2015, the United States Postal
Service published a final rule to revise the rules concerning
authorization to manufacture and distribute postage evidencing systems,
and to reflect new revenue assurance practices (80 FR 42392). Postage
collection under the new rules will start on August 1, 2017. On
September 6, 2016, the Postal Service published a proposal for further
revisions to the rules concerning revenue assurance in 39 CFR 501.16 to
support our efforts to collect the appropriate revenue on mail pieces
in a more automated fashion (81 FR 61159). If adopted, these additional
changes were also to be implemented on August 1, 2017.
In response to this further proposal, the Postal Service received a
number of comments from the mailing industry. The Postal Service
appreciates all of the comments that were provided, and has, where
appropriate, modified the proposed rules in response. The industry
comments and corresponding Postal Service responses are outlined as
follows.
Summary of Industry Comments and USPS Responses
Industry Comment: Because PC Postage providers (as defined in
paragraph 501.16(i)(1)) are being asked to perform revenue assurance
functions that the Postal Service would otherwise have to perform, PC
Postage providers should be compensated for the costs imposed by the
new system.
USPS Response: The Postal Service has previously stated to the
industry that there will be no compensation for costs imposed by the
new system. These rules are narrowly tailored to resolve current
revenue collection challenges posed by the PC Postage program. Serving
as a PC Postage provider is a choice and a privilege. The Postal
Service is providing notice to the industry that compliance with these
rules is a necessary condition of serving as an authorized PC Postage
provider, and there will be no compensation for implementing or
maintaining necessary infrastructure to support the revenue assurance
program.
Industry Comment: The Postal Service should seek to minimize the
costs imposed by the new system, including by permitting monthly
payments and reconciliations.
USPS Response: The Postal Service has sought to minimize costs by
designing the system to take advantage of existing processes whenever
possible. For example, the requirements will be phased in through the
use of a postage adjustment threshold amount. While the PC Postage
providers and their customers are adjusting to the revenue assurance
program, the Postal Service will initially adopt appropriate threshold
amounts to support the success of the program. The Postal Service will
thereafter reduce the threshold amount as the Postal Service deems
appropriate based on data and trends.
With respect to allowing certain PC Postage providers to aggregate
and reconcile postage adjustments (as defined in paragraph
501.16(i)(2)(i)) on a monthly basis, the Postal Service does not agree
with this approach and maintains that all collection and refund
transactions and reconciliations must occur within the time frames set
forth in paragraph 501.16(i)(2)(iii) . Currently, all postage payments
in existing systems are reconciled daily; since we are taking advantage
of existing processes it makes sense to reconcile the adjustments daily
or else entire new processes would need to be put in place. Moreover,
permitting payment plans or partial payments for certain PC Postage
providers would only complicate the adjudication and reconciliation
processes and put burdens on both of our accounting and finance teams.
Industry Comment: PC Postage providers should not be required to
adjudicate disputed postage assessments.
USPS Response: The Postal Service acknowledges that the PC Postage
providers cannot adjudicate disputes; the PC Postage providers,
however, need to be the first line of interaction with their customers
and educate them on root causes of short-paid assessments and how to
avoid them in the future. Initially, the Postal Service will have a
customer care center dedicated exclusively to this program, as we
understand customers will need to adjust to our new policies and
processes with respect to assessing postage in an automated manner.
Industry Comment: The definition of a reseller should be further
clarified. The proposed rule confuses the definition of a PC Postage
provider by inconsistently expanding the definition in a way that would
capture some (but not all) postage resellers.
USPS Response: The definition of reseller in paragraph 501.16(i)(1)
represents the current position of the Postal Service, that only
resellers who pay postage directly to the Postal Service (and not
through a PC Postage provider) shall be treated as a PC Postage
provider under the regulations. Certain resellers are authorized to pay
postage directly to the Postal Service instead of through a PC Postage
provider, provided that they comply with certain processes and
requirements that are akin to the processes and requirements that are
imposed on PC Postage providers. Accordingly, such resellers already
are treated separately in several ways. For example, they are required
to submit transaction log files and comply with specific payment
processes so that the Postal Service can reconcile and account for the
payments. Since such resellers do not pay through a PC Postage
provider, it is necessary that the reseller (and not the PC Postage
provider) facilitate the collection and refund of postage adjustments
under these regulations.
Industry Comment: The final rule should also clarify that ePostage
and eVS labels are subject to the revenue assurance practices.
USPS Response: Each sales platform is unique and has different
characteristics, including different price structures and acceptance
procedures. The current application of revenue assurance for all
platforms is varied, and predicated on what the Postal Service has
deemed appropriate from a cost, risk, and workflow standpoint.
Industry Comment: Allowing reciprocal adjustments for overpayments
is an improvement. Additionally, the final rule should clarify the
process and timing for the Postal Service to reimburse PC Postage
providers or customers for postage adjustments in connection with
overpayments. Proposed paragraph 501.16(i)(2)(iii)(C) states that the
postage adjustment must be made within 60 days; the final rule should
clarify that the Postal Service will provide payment within that time
frame.
USPS Response: The Postal Service will issue refunds only in cases
where
[[Page 15465]]
the customer has closed its Postage Evidencing System account. In all
other cases, reimbursements for overpayments will be provided in the
form of a credit to the Postage Evidencing System account or through a
reconciliation performed by the PC Postage provider. We agree with this
comment, and have clarified the process and time frames within this
final rule.
Industry Comment: The account suspension processes needs to be
clarified.
USPS Response: The Postal Service maintains that the suspension
process is clear. When a PC Postage provider cannot immediately recover
funds from a customer's account for any reason it must immediately
suspend the customer's ability to produce postage until the postage
adjustment has been paid in full. The customer can dispute any postage
adjustments prior to or after making payment. The Postal Service
maintains the discretion to instruct PC Postage providers to allow a
customer to continue printing postage. Separately, the Postal Service
reserves the discretion to compel PC Postage providers to suspend
accounts upon request in certain instances, such as when fraud is
suspected; this is a necessary function in support of revenue
assurance. To satisfy due process concerns, the PC Postage providers
are required to provide notice of the revenue assurance requirements,
including the suspension terms, to their customers and ensure that the
customers agree to the requirements before the customers complete
another transaction.
Industry Comment: The process for changing the revenue assurance
rules should be clarified.
USPS Response: The process and rules are described in the final
rule. Any additional rules or updates, as needed, will be published in
the Federal Register in accordance with paragraph 501.16(i)(2)(v).
Industry Comment: The indemnity provision is overbroad.
USPS Response: The Postal Service believes this provision is
reasonable and appropriate. Serving as a PC Postage provider is a
privilege, and companies that choose to participate in the PC Postage
program are required to comply with certain rules that protect the
Postal Service from legal, reputational and financial risk. A PC
Postage provider that fails to comply with the rules should be liable
for the damages the Postal Service suffers as a result of that failure.
Industry Comment: The proposed rule sets an unrealistic deadline
for implementation before the solution has been fully defined and ready
for implementation.
USPS Response: In response to this comment, the Postal Service has
moved the implementation date to August 1, 2017. Any software that
needs to be built should still be completed by the original
implementation date of March 20, 2017, to allow ample time for a
warning period. This is reasonable since the Postal Service has been
working with all PC Postage providers for over two years on the
planning and implementation of this project.
Industry Comment: PC Postage providers should not be liable to pay
the short-paid or unpaid amounts in instances where providers are
unable to collect.
USPS Response: The Postal Service agrees that as a general matter
the customer, and not the PC Postage provider, should be held
responsible for the postage adjustment. The PC Postage provider is
responsible for either paying the adjustment or seeking to collect the
postage adjustment from the customer and simultaneously prohibiting
additional postage generation by said customer while postage is
outstanding. The PC Postage provider must notify the customer of the
details of the postage adjustment (including the dispute process),
retain evidence that such notice was actually received by the customer,
and attempt to collect the postage adjustment by adjusting the funds
available to the customer in the Postage Evidencing System, or if funds
are not available, facilitating customer payment by invoicing the
customer or by pursuing other methods available to collect against the
customer or access funds of the customer. Immediately upon receiving
notice of the underpayment from the Postal Service, the PC Postage
provider shall prohibit the customer from printing additional postage
labels until the postage adjustment is satisfied or the customer
disputes the adjustment and prevails. The final rule provides that the
customer is responsible for short paid amounts except in certain cases
where it is reasonable to hold the PC Postage provider accountable,
such as in cases where the PC Postage provider caused the underpayment
by incorrectly programming postage rates.
Industry Comment: Provisions that regulate marketing practices of
providers fall outside the jurisdiction of the Postal Service.
USPS Response: Serving as a PC Postage provider is a privilege and
comes with certain responsibilities that are aimed at protecting the
Postal Service and customers. This provision is narrowly tailored to
ensure that the PC Postage providers, when selling and marketing Postal
Service products, comply with applicable laws and describe Postal
Service products accurately. The purpose of this provision is to
protect customers and limit the Postal Service's potential liability
under consumer protection and other laws.
List of Subjects in 39 CFR Part 501
Administrative practice and procedure.
Accordingly, for the reasons stated, the Postal Service amends 39
CFR part 501 as follows:
PART 501--AUTHORIZATION TO MANUFACTURE AND DISTRIBUTE POSTAGE
EVIDENCING SYSTEMS
0
1. The authority citation for 39 CFR part 501 continues to read as
follows:
Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 404, 410,
2601, 2605, Inspector General Act of 1978, as amended (Pub. L. 95-
452, as amended); 5 U.S.C. App. 3.
0
2. In Sec. 501.16, revise paragraph (i) to read as follows:
Sec. 501.16 PC postage payment methodology.
* * * * *
(i) Revenue assurance. (1) The PC Postage provider must support
business practices to assure Postal Service revenue and accurate
payment from customers. For purposes of this paragraph, PC Postage
provider shall mean: providers who offer PC Postage products (as such
terms are defined in Sec. 501.1); Click-N-Ship[supreg] service; and
postage resellers when such resellers transmit postage revenue to the
Postal Service in any manner other than through a PC Postage provider.
With respect to the reseller transactions described above, the
resellers, and not the PC Postage providers who provide the labels, are
responsible for complying with this paragraph. For the purpose of this
paragraph, a reseller is an entity that obtains postage through a PC
Postage provider and is authorized to resell such postage to its
customers pursuant to an agreement with the Postal Service. For
example, an entity that sells postage to its customers, but uses a PC
Postage provider to enable its customers to print postage labels, is a
reseller hereunder. If that entity collects postage revenue from its
customers and transmits it to the Postal Service directly (instead of
through the PC Postage provider) that entity shall be deemed a PC
Postage provider hereunder. For the purpose of this paragraph, a
customer is the person or entity that deposits the mail piece into the
mail system. PC
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Postage providers must comply with these revenue assurance requirements
regardless of whether they have a direct relationship with the customer
or sell postage to the customer through one or more resellers.
(2)(i) For the purposes of this paragraph, a postage adjustment is
defined as the difference between the postage or fee actually paid to
the Postal Service for a specific service, and the actual postage due
to the Postal Service under the published or negotiated rate for that
service, as applicable, which shall be calculated as of the time the
mail piece is entered into the mailstream.
(ii) When the collection of a postage adjustment or the provision
of a refund is appropriate because a customer has underpaid or overpaid
the amount of postage that should have been paid, and such postage
adjustment exceeds a threshold amount to be set by the Postal Service
from time to time in its discretion, the PC Postage provider must, upon
receiving notice from the Postal Service, pay, attempt to collect, or
refund, as applicable, the postage adjustment in accordance with
paragraph (i)(2)(iii) of this section. The Postal Service will supply
the PC Postage provider with the details necessary to explain the
correction and the amount of the postage adjustment to be used in the
adjustment process. As part of this process, the PC Postage provider
shall enable customers to submit disputes concerning the postage
adjustment to the Postal Service, in a method approved by the Postal
Service, including via phone call to the customer care center or API in
the PC Postage provider's user interface of postage collections. In
addition, the PC Postage provider must convey the Postal Service's
dispute decision to the customer. If the Postal Service determines the
customer's dispute was valid, and the customer had already paid the
postage adjustment, the PC Postage provider must return the postage
adjustment to the customer when notified by the Postal Service
according to the rules set forth in paragraph (i)(2)(iii)(B) of this
section.
(iii)(A) In the case of an underpayment that exceeds the threshold
amount, within 14 business days of receiving notice of the underpayment
from the Postal Service the PC Postage provider must pay the postage
adjustment directly to the Postal Service, or seek to collect the
postage adjustment from the customer in accordance with this paragraph.
If the PC Postage provider opts to pursue collection activity, it must
notify the customer of the details of the postage adjustment (including
the dispute process), retain evidence that such notice was actually
received by the customer, and attempt to collect the postage adjustment
by adjusting the funds available to the customer in the Postage
Evidencing System, or if funds are not available, facilitating customer
payment by invoicing the customer or by pursuing other methods
available to collect against the customer or access funds of the
customer. If the customer has a Postage Evidencing System account, the
PC Postage provider must process any refunds due to the customer under
paragraph (i)(2)(iii)(B) of this section before processing any
collections due to the Postal Service hereunder. If the PC Postage
provider opts to pursue collection activity, it shall continue to make
affirmative efforts to collect the postage adjustment from the customer
until the postage adjustment is satisfied in whole or the collection
period (as defined in paragraph (i)(2)(iii)(C) of this section)
expires. Immediately upon receiving or securing access to funds of the
customer, the PC Postage provider shall remit to the Postal Service any
and all available funds from the customer's account from the Postage
Evidencing System or that are otherwise recovered by the PC Postage
provider to the extent necessary to satisfy the postage adjustment. The
postage adjustment must be paid in full; no partial payments will be
accepted by the Postal Service, except for payments made under
paragraph paragraph (i)(2)(iii)(C) of this section.
(B) In the case of an overpayment that exceeds the threshold
amount, the Postal Service shall within 14 business days of identifying
the overpayment, provide notice of the postage adjustment to the PC
Postage provider and instruct the PC Postage provider to give the
customer a credit and adjust the funds available to the customer in the
Postage Evidencing System. If the Postage Evidencing System account has
been closed or for customers who do not have individual Postage
Evidencing System accounts, the Postal Service shall instruct the PC
Postage provider to issue a refund to the customer and the Postal
Service shall either refund the postage adjustment to the PC Postage
provider or permit the PC Postage provider to submit a reconciliation
to the Postal Service. The PC Postage provider must immediately upon
receiving notice of the overpayment from the Postal Service, notify the
customer and, consistent with the Postal Service's instructions, adjust
the funds available to the customer in the Postage Evidencing System,
refund the postage adjustment to the customer, or provide a credit to
the customer. If the PC Postage provider is unable to comply with the
above requirements within 2 business days, the PC Postage provider must
immediately notify the Postal Service.
(C) The collection period is a time period to be set by the Postal
Service not to exceed 60 calendar days after initial notification by
the Postal Service, subject to any applicable notification periods and
dispute mechanisms that may be available to customers for these
corrections. If an underpayment has not been satisfied within this
collection period, the PC Postage provider shall adjust any funds
available to the customer in the Postage Evidencing System to satisfy
the postage adjustment to the greatest extent possible, and assist the
Postal Service in its efforts to pursue any remedies that may be
available in law or equity, including seeking payment directly from the
customer.
(iv)(A) In the case of an underpayment that exceeds the threshold
amount, immediately upon receiving notice of the underpayment from the
Postal Service the PC Postage provider shall prohibit the customer from
printing additional postage labels until the postage adjustment is
satisfied in accordance with paragraph (i)(2)(iii)(A) of this section,
or the customer disputes the adjustment and prevails. The Postal
Service may, in its discretion, waive or delay this prohibition in
specific instances.
(B) Separately, without regard to any threshold, in certain cases
(such as where a customer is suspected of having intentionally or
repeatedly underpaid postage) the Postal Service may, in its
discretion, instruct the PC Postage provider to shut down temporarily
or permanently a customer's ability to print PC Postage, and the PC
Postage provider shall promptly comply with such instruction.
(C) In no event shall the Postal Service be liable to any PC
Postage provider, customer or other party for any direct, indirect,
exemplary, special, consequential, or punitive damages (including
without limitation damages relating to loss of profit or business
interruption) arising from or related to any customer's permanent or
temporary inability to print postage labels in accordance with this
paragraph (i)(2)(iv) or as a result of funds offset in accordance with
this paragraph.
(v) The Postal Service, in its discretion, may adopt and modify
from time to time, and the PC Postage providers shall comply with,
business rules setting forth processes (including
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time constraints) for payments, refunds, account suspensions,
collections, notifications, dispute resolutions and other activities to
be performed hereunder. Such business rules will be published in the
Federal Register.
(3)(i) Without regard to any threshold, if the PC Postage provider
incorrectly programmed postage rates, delayed programming postage rate
changes, or otherwise provided systems or software which caused
customers to pay incorrect postage amounts, then within two calendar
weeks of the PC Postage provider being made aware of such error, the PC
Postage provider shall:
(A) Correct the programming error;
(B) Provide the Postal Service with a detailed breakdown of how the
error affected the PC Postage provider's collection of revenue; and
(C) Pay the Postal Service for the postage deficiency caused by the
programming error, except in instances where the error was caused by
the Postal Service or as a direct result of incorrect specifications
provided by the Postal Service.
(4) The PC Postage provider is responsible for ensuring that:
(i) All customers pay (and the Postal Service receives) the current
published prices that are available to customers who purchase postage
through an approved PC Postage provider, or negotiated contracted
prices where applicable in accordance with this paragraph; and
(ii) All payments to the Postal Service (or the log files necessary
for the Postal Service to collect payments directly from customers) are
complete and accurate and are initiated or transmitted, as applicable,
to the Postal Service each day.
(5) Each PC Postage provider shall:
(i) Before each customer's first transaction following the
implementation date of August 1, 2017, provide notice to such customer
of the terms, conditions and processes described in this paragraph--
including, without limitation, that the customer may be charged for
deficient payments and prevented from printing additional postage
labels while a postage adjustment remains unpaid--and obtain a
certification from each customer that the customer has read,
understands and agrees to such terms, conditions and processes, as they
may be amended or supplemented from time to time;
(ii) Ensure that each customer certifies that it:
(A) Will comply with all laws and regulations applicable to Postal
Service services, including, without limitation, the provisions of the
Domestic Mail Manual and the International Mail Manual,
(B) Does not owe any money to the Postal Service and is not a
controlling member or officer of an entity that owes money to the
Postal Service, and
(C) Authorizes the PC Postage provider to disclose the customer's
personal information to the Postal Service and such other information
retained by the PC Postage provider that may enable the Postal Service
to collect debts owed to it;
(iii) Maintain a complete and accurate record for each customer,
which includes such customer's current name and a valid U.S. address
that is sufficient for service of process under the law, as well as a
copy of all terms agreed to by the customer and the date of such
agreements;
(iv) Comply with applicable laws, rules, regulations and guidelines
and ensure that its Postage Evidencing Systems, software, interfaces,
communications and other properties that are used to sell or market
Postal Service products accurately describe such products;
(v) Cover any costs or damages that the Postal Service may incur as
a result of such PC Postage provider or its employees, contractors, or
representatives failing to comply with the terms of this section, or
any applicable law, regulation, rule, or government policy; and
(vi) In performing its obligations hereunder, comply with the
business rules that shall be published in the Federal Register from
time to time and provide all agreed-upon interface documentation (as
updated from time to time).
(6) In the event that the Postal Service fails to exercise or
delays exercising any right, remedy, or privilege under this paragraph,
such failure or delay shall not operate as a waiver thereof or of any
other provision hereof, nor shall any single or partial exercise of any
right, remedy, or privilege preclude any further exercise of the same.
The rights and remedies available to the Postal Service under this
paragraph are cumulative and in addition to, and do not diminish, any
rights or remedies otherwise available to the Postal Service.
Stanley F. Mires,
Attorney, Federal Compliance.
[FR Doc. 2017-06167 Filed 3-28-17; 8:45 am]
BILLING CODE 7710-12-P