UPS again plays the role of Defendant this New Year in a class action lawsuit filed in the State of Michigan. One Steven Sitak of Michigan, and International Samaritan, a charitable organization serving the poor in Latin America, have filed a class action lawsuit against UPS with the help of the Complex Litigation Group LLC. The matter is fairly simple, and one that has perplexed auditors for years.
UPS offers a minimum declared value of $100 for every package shipped to cover loss or damage claims. Beyond $100, shippers pay $0.85/$100 in value. As stated in the UPS Tariff:
“– UPS’s liability for loss or damage to a shipment is limited to $100.00 without a declaration of value.– The maximum declared value is $50,000.00 per package. UPS’s liability for loss or damage can be increased up to $50,000.00 (subject to terms and conditions) by making a declaration of value for an additional charge.
– $0.00-$100.00 $0.00
– $100.01-$50,000.00 for each $100.00 (or portion of $100.00) of the total value declared $0.85– Minimum $2.55″
Though the tariff states that the first $100 is free, once a shipper pays for a declared value beyond $300 (the minimum DV charge is $2.55), UPS includes a $0.85 charge for the first $100 in its declared value calculation.
The complaint states the problem succinctly:
“However, despite the explicit representation and contractual promise that the first $100 of liability coverage is provided at zero cost to the shipper, on information and belief when a shipper purchases additional coverage for a declared value in excess of $300.00, UPS charges the shipper $0.85 for the first $100 in coverage and an additional $0.85 for each additional $100 in coverage or portion thereof.
For example, on information and belief, where a customer declares a value of $350.00, instead of charging $2.55 (the “minimum,” which is also 3 X $0.85 for each $100 or portion thereof in excess of $100), UPS charges $3.40. As a further example, on information and belief, for a declared value between $400 and $500, UPS charges $4.25, and so on”