USPS To Refuse Standard Class Financial Mail

The United States Postal Service has ruled that it will no longer mail 'Skip-A-Payment notices for financial institutions at the Standard Mail rate.

Nashville, TN (PRWEB) January 29, 2004 --The United States Postal Service has ruled that it will no longer mail 'Skip-A-Payment notices for financial institutions at the Standard Mail rate. In denying an appeal made by Strategic Direct Marketing, Inc. (SDMI) of Nashville, TN, the USPS ruled on January 16, 2004 that mailings containing specific account data such as a loan number or payment amount must be mailed at the First-Class rate.

The ruling by Sheldon J. Gorovsky, Manager of the USPS Rates and Classification Service Center in Fox Valley, IL, states, the inclusion of the loan number and the monthly payment amount is considered actual and personal information... Consequently, the mail piece must have First-Class postage paid," he said.

This ruling may cost financial direct marketers tens of millions of dollars in additional postage per year, according to SDMI agency head Randall Putala. The largest financial mailers send tens of millions of Standard Class letters per year, including 'Skip-A-Payment notices, Convenience Checks and pre-approved credit card and loan offers. Many of these letters feature live account numbers plus individual balance and payment information, which under this ruling could disqualify them for Standard Mail Postage Rates," according to Putala.

The cost implications of this ruling could be large: on a typical 5-Digit Automation Rate mailing, the current rate difference between Standard Mail and First-Class rates is $0.088 per unit, or $88 per thousand pieces mailed. For large financial mailers who often mail 10 million units or more per month, the ruling could increase their cost of operations by $880,000 per month.

"It remains to be seen whether the large banks can afford to pay these additional fees," said Putala. Many of these mailing programs are geared toward revenue generation, and are not mandatory or legally-required mailings," he said. I believe this ruling will cause many banks and credit unions to re-think the benefit of these optional mailings, and reduce their frequency or eliminate the programs entirely based on the increased postage costs. In the long run, it could actually reduce USPS revenues," he added.

SDMI has been mailing 'Skip-A-Payment letters for more than 13 years at the Standard Class rate, so this new ruling could put a damper on the 2004 marketing plans of the agencys clients, according to Putala. The major check printers and financial trade groups have also been mailing these letters for years at the Standard Class rate, so Im sure this will impact their business plans as well," he said.

With thousands of mailing campaigns being sent each month by financial institutions, it remains to be seen whether the USPS can or will enforce this ruling unilaterally. We will be glad to comply with this new ruling, as long as the major banks and larger financial mailers must comply as well," said Putala. We will be vigilant in monitoring the actions of the large mailers to be certain that smaller mailers are not being unfairly singled out by this ruling," he added.

Copies of the USPS ruling document and the disputed mailing piece may be viewed on the companys web site, www.sdmi3.com. Founded in 1990, SDMI serves banks, credit unions, and other companies nationwide.
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