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FedEx residential surcharge overcharge lawsuit

Today, a needed reminder of old but highly relevant news.

In 2011 FedEx was accused of systematically overcharging clients with bogus residential surcharges for packages going to commercial addresses.

The ‘smoking gun’ in the case was an email from a FedEx executive, one Alan Elam, in an email made public in the lawsuit:
“I have brought this to attention of many people over the past five or six years, including more than one managing director, and no action has been taken to address it,” and later, “My belief is that we are choosing not to fix this issue because it is worth so much money to FedEx”.

This is exactly what Direct-Recovery has claimed for years. There’s good money to be made in residential surcharges – over $3 a pop. That’s why we cross-check every airbill dinged with a residential surcharge to make sure it was actually going to a residential address. If not, and there’s way too many in our experience, we secure a refund on our customer’s behalf.

That’s what we call our low hanging audit fruit. Too many shippers pay these surcharges when they don’t have to. We also go after the harder to find audit fruit with our 40 point audit.

You can, in faith, believe every carrier charge is accurate. Or, you can put your faith in something bigger, and let Direct-Recovery hold FedEx and UPS accountable for any and all bogus charges – intentional or otherwise.

And the class action lawsuit? Settled in November 2013. FedEx paid out $16,500,000 to some 475,000 customers. By my cynical math, that works out to about $10M in legal fees, and $13.50 in refunds to each of those 475,000 customers.

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