New York announces $2.4 million settlement in overcharging scheme

Nearly 1,000 New York government entities will receive a check for overcharges as part of a $2.4 million settlement with one of the nation’s largest medical waste disposal companies. Under the agreement, Stericycle, Inc., will fully reimburse New York police and fire departments, schools, hospitals, prisons and other entities for a scheme to charge automated price increases without notice and in violation of contract terms.

New York Attorney General Eric Schneiderman announced the settlement resulting from an investigation into a federal whistleblower complaint filed by a former Stericycle employee. The investigation found that since 2003, Stericycle had programmed its billing system to increase by 18 percent, an amount designed to go undetected by customers. If customers complained, Stericycle employees were instructed to state that the company had incurred increased costs from new environmental regulations or other causes.

Under the settlement, Stericycle will reimburse every impacted government entity for the full amount of overcharges. The company also agreed to stop automated price increases to New York government customers and provide customers with notice and opportunity to opt-out before future rate increases.

Government entities affected by the overcharges are located throughout New York. Some entities receiving the largest compensation include the WF Bruen Rescue Squad, Rensselaer, $26, 671.16; Albany Sheriff’s Correctional, $22,160.28; Broome Community College, Binghamton, $13,966.86; Clinton Correctional Facility, Dannemora, $21,094.35; and Cornell University College of Veterinary Medicine, Ithaca, $9,409.46.