States Scrambling on UPS Dim Weight Debacle
SAN DIEGO (Blue MauMau) - After franchise owners of The UPS Stores and Mail Boxes Etc. filed state complaints over United Parcel Services’ flawed laser technology, some states are now struggling with how they are going to deal with shipping giant’s fiasco of overcharging the public. In Michigan, one franchisee said that state officials told him that because UPS had installed the weighing equipment itself it was done illegally. By law, any kind of measuring devices must be installed and inspected by the states. But he was told UPS never had government oversight to make sure the re-measuring machines, used on every package, were calibrated correctly. Since the franchise stores generate one percent of all UPS sales per year, the number in back charges could be tremendous with over 4000 franchise stores. At his own store, the franchisee said he is billed an average of $300 per month for back charges, which is next to impossible to collect from customers.
The complaint in Michigan was quickly taken to the Attorney General’s office, but when franchisees checked in other states it was a different story. Colorado, according to one franchise owner, had received a complaint several months prior regarding the accuracy of the laser machines. As a result, state officials went out to UPS facilities and tested the equipment themselves. His contact person with the state told him that when they tested the same package five times they received different measurements on each one. UPS staff members from Atlanta observed the tests, but did not answer questions as to how they would handle back charges from customers. According to the franchisee, after Michigan contacted Colorado to find out what action it was taking, the state became silent on the issue, other than stating that UPS claimed to come under federal aviation law because of the number of airplanes in its fleet in delivering packages. But Michigan disagrees, saying they have not found anything showing UPS has an exemption from state law. The franchise owner said, “UPS is now using this law to hide behind in overcharging the public with faulty equipment.” When he talked with his contact in Colorado he was told that because they had a low budget on weights and measures, they could not go after UPS and take it to a federal level. Franchisees are finding out that other states are just letting the situation go.
UPS Reacts to Class Action
When franchisees discovered that a class action lawsuit was being filed in California on behalf of anyone who ships under contract with UPS, they decided to join in. On May 2, UPS was hit with the lawsuit filed by the law firm of Hagens Berman Sobol Shapiro.
The complaint states that UPS account holders argue that because the re-measurement process occurs at UPS facilities, they have no ability to dispute the revised measurements, and they have no way to reassess the additional charges. Attorneys say that the problem is widespread costing UPS six digit account holders millions of dollars in back charges.
As soon as the Proposed Class Action Complaint was filed, franchisees received a letter from corporate office which was blasted to the entire network. UPS Store president Stuart Mathis shared with its Franchisee Advisory Council members that after his experience with the laser measuring devices he concluded they were generally accurate, but said there were mistakes. As a result, the FAC strongly recommended to franchisees that when they are estimating box sizes for center packed items they should “add 1” to the inside measurements of the box.” FAC also recommended that charges be waived for The UPS Store network. But some franchisees don’t think much of the franchisor’s solution. One stated, “They are telling us to go ahead and commit fraud in using the equipment.”
But when the issues continued to grow, Mathis sent out a new letter to all franchisees, region coordinators and district consultants on June 21, urgently explaining the process franchisees should take in disputing back charges. Although franchisees feel the company is trying to rectify its problems with them, they question what UPS is doing for all other account holders that are still being overcharged.
It appears that some states are now watching to see what happens in Michigan, hoping it will set a precedent for them in resolving UPS’s problem of overcharging the public. According to one franchisee, Michigan has also contacted Canada’s government to let them know that their country is in the same predicament. But he says that at least Canada does have a federal weights and measures department, where in the U.S. it’s separated by state.
Pez Afrin, a franchisee in Michigan, compares the UPS situation to the oil industry’s operation of gasoline stations. He said, “Imagine if the oil companies were in charge of calibrating their own pumps in place of the government. Do you believe that you could trust them to give you exactly $3 for a gallon of gas, or do you believe it would open the doors to all kinds of misconduct?”
A spokesperson for The UPS Stores said they would not be able to respond to questions by press time due to other deadlines. Telephone calls to Colorado and Michigan, Departments of Agriculture Weights and Measures, also did not have time to respond. An update on this article will be posted pending additional interviews.
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