UPS Class Action Says Delivery Area Surcharge is a ‘Bait and Switch’

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A class action lawsuit filed by a California man claims UPS has been hitting retail customers with a delivery area surcharge that’s almost double the company’s published rate.

Plaintiff Randall Holl is challenging the way UPS assesses what it calls a “delivery area surcharge.” According to the company’s published rates, the delivery area surcharge should range from $1.50 to $4 per package.

Holl says that for its account-holding customers, UPS assesses the delivery area surcharge in accordance with its published rates.

But for retail customers who ship packages through UPS retail affiliates, Holl claims the company charges a delivery area surcharge well in excess of its published rates – sometimes almost double the published amount.

According to this UPS class action lawsuit, none of UPS’s 16,000 independently owned and operated retail stores have any power over this allegedly inflated delivery area surcharge.

Instead, Holl says UPS has purposely designed the billing component of its iShip software to assess this inflated delivery area surcharge on customers of these retail locations.

“UPS purposely and explicitly engineered its shipping software to charge retail customers approximately double the company’s published Delivery Area Surcharge. UPS retains for itself all of the ill-gotten profits from the inflated charges,” Holl claims.

Retail websites like eBay spread the alleged deception by offering shipping estimates based on the company’s published rates, not the actual inflated rates.

He says this practice amounts to a bait and switch. UPS is allegedly responding to its extremely competitive environment by publishing a lower surcharge but charging a higher one, Holl claims.

According to the class action, UPS is simply taking advantage of the fact that once a customer commits to paying for shipping, they will complete the transaction on the assumption that the amount they’re paying is the proper amount for which UPS should have billed them.

“By creating a bait and switch, UPS makes far more money than it would by fairly advertising its rates,” the plaintiff claims.

Holl says that in June 2016, he shipped a package through a UPS retail location in Healdsburg, Calif. to a destination in Big Lake, Minn. He says he was charged a delivery area service charge of $5.92.

But according to UPS’s published rates, he claims the delivery service charge should have been $3.15.

Holl says his attorney sent UPS a letter in August 2016 laying out the basis of his claims. He received no response before filing this UPS class action lawsuit, he says.

The plaintiff proposes to represent a Class consisting of all persons who, between four years prior to the filing of this action until the date of trial, shipped a parcel through a UPS retail affiliate and were charged a delivery area surcharge that exceeded the amount listed in UPS’s Retail Rates.

He is asking the court to award damages, restitution of all money improperly obtained, court costs and attorneys’ fees, all with pre-judgment interest.

Holl is represented by attorneys Matthew C. Helland, Kai H. Richter and Brock Specht of Nichols Kaster LLP and Adam W. Hansen of Apollo Law LLC.

The UPS Inflated Surcharge Class Action Lawsuit is Randall Holl v. United Parcel Service Inc., Case No. 3:16-cv-5856, in the U.S. District Court for the Northern District of California.