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UPS eyed as source for names

Firm may have given customer data to state in cigarette tax probe

United Parcel Service, apparently breaking an earlier pledge, appears to have turned over to the Massachusetts Department of Revenue the names and addresses of Bay State customers to whom it has delivered cigarettes from out-of-state vendors. The Revenue Department, which obtained the information by using an administrative summons, is sending letters to the customers demanding they remit unpaid cigarette excise taxes plus interest and penalties. The agency also threatened civil fines and imprisonment if the taxes are not paid within 30 days.

The letters, which don't say how the agency learned that the consumers had purchased cigarettes out of state, have alarmed many of the recipients. Several of them contacted the Globe to say they considered it an invasion of privacy.

One customer, who asked not to be identified, said he contacted both his cigarette supplier, Dirtcheapcigs.com of Fenton, Mo., and its shipping company, United Parcel Service, and both firms told him they did not release his name.

The customer worried that the Revenue Department had some other means of monitoring his Internet purchases.

But department spokesman Timothy Connolly indicated either Dirtcheapcigs or UPS had provided the information.

"Someone is not telling the truth," he said.

Connolly, citing two provisions in state law, would not divulge the agency's source of information.

UPS spokeswoman Susan Rosenberg said she didn't know whether her company had supplied the information to Massachusetts. But she said the company's privacy policy states that UPS would release customer information only in response to a formal legal request from a state or federal agency.

John Rogers, a St. Louis attorney representing Dirtcheapcigs, said he believes UPS was the source. He said Dirtcheapcigs is currently being sued by California and Maryland and in both cases the discovery process has turned up UPS spreadsheets listing Dirtcheapcigs deliveries.

Rogers said Dirtcheapcigs does not divulge the names of any of its customers. He estimated the company has several thousand customers in Massachusetts, many of whom had called the company over the last week after receiving letters from the Revenue Department. He said he did not know whether Dirtcheapcigs would sever its ties with UPS.

In August, the Revenue Department said in a report to the Legislature that 10 Internet cigarette vendors and one delivery company had provided customer information to the state.

At that time, a UPS spokesman said that his firm was not the company that had provided the information and would resist efforts to obtain the information.

"We keep confidential information confidential," said UPS spokesman David Bolger. "We are not a tax collector. We are a delivery service provider."

UPS's apparent change of heart may now make consumers think twice before ordering cigarettes from Internet vendors, no matter how much the vendors promise to keep their purchasing information confidential.

Connolly at the Revenue Department said only one delivery company had provided information to the agency so far, although he said other firms would be pursued in the future. Both FedEx Corp. and the US Postal Service have privacy policies similar to that of UPS.

Since Massachusetts increased the cigarette excise tax to $1.51 a pack, one of the highest levels in the country, the state has aggressively pursued consumers attempting to avoid the tax by buying their cigarettes in New Hampshire or on the Interet.

Attorney General Thomas F. Reilly last month sued Dirtcheapcigs and two other Internet cigarette vendors, charging them with selling to underage customers and failing to conspicuously disclose that cigarettes are subject to an excise tax of $15.10 a carton.

While the customers who contacted the Globe acknowledged they purchased cigarettes on the Internet to avoid the excise tax, they said the Revenue Department's pursuit was an invasion of privacy.

"We don't feel as if we're invading anyone's privacy," Connolly said. "We're just following the Legislature's command in a law passed last year that said we have to aggressively pursue unpaid excise taxes on cigarettes sold out of state and on the Internet."

Bruce Mohl can be reached at mohl@globe.com.

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