UPS accused of overcharging for shipping insurance

By Kyla Asbury | Jan 9, 2014

DETROIT (Legal Newsline) - A class action lawsuit has been filed against United Parcel Service Co. after a consumer claims it has been overcharging for shipping insurance.

Steven B. Sivak and International Samaritan, a nonprofit corporation that is a charity that provides assistance to poor people living in garbage dumps in Central America, have shipped multiple packages via UPS with a declared value in excess of $300 and have been overcharged for additional coverage protection by UPS, according to a complaint filed Dec. 27 in the U.S. District Court for the Eastern District of Michigan-Southern Division.

The plaintiffs said prior to filing the complaint, they made a good faith attempt, through counsel, to file a claim pursuant to UPS's Tariff/Terms and Conditions of Service via the company's Web site, however, UPS failed to permit Sivak to file a claim because he lacked a tracking number and did not have a UPS account.

Despite the explicit representation and contractual promise that the first $100 of liability coverage is provided at zero cost to the shipper, when a shipper purchases additional coverage, the shipper is charged $0.85 for the first $100 in coverage and an additional $0.85 for each additional $100 in coverage, according to the suit.

"The effect of this systematic policy and procedure is that customers who purchase additional coverage from UPS under current rates are paying for coverage that is supposed to [be] provided for free or no cost," the complaint states.

The plaintiffs claim UPS is aware of the issue, as it has been brought to its attention by numerous consultants that represent large value shippers.

Despite this knowledge, UPS has not changed its practice of charging for the initial $100 in coverage, according to the suit.

The plaintiffs claim all persons residing in the United States who purchased additional declared value coverage from UPS for a declared value in excess of $300 are part of the class.

The plaintiffs are seeking for an order certifying the class under Rule 23 of the Federal Rules of Civil Procedure and naming them as class representatives and their attorneys as class counsel; an order finding in favor of the plaintiffs and the class on all counts asserted; an order awarding damages to be determined by the court or jury; pre-judgment interest; an order of restitution and all other forms of injunctive and/or equitable relief; an order awarding treble damages; and for an order preserving the status quo regarding the plaintiff and class members; rights.

They are being represented by solo practicioner Andrew J. McGuinness and Jeffrey A. Leon of Complex Litigation Group LLC.

UPS is being represented by Paul T. Friedman of Morrison Foerster.

The case has been assigned to District Judge Gerald E. Rosen.

U.S. District Court for the Eastern District of Michigan-Southern Division case number: 2:13-cv-15263

From Legal Newsline: Kyla Asbury can be reached at classactions@legalnewsline.com.

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