CLASS-ACTION SUIT CLAIMS UPS OVERCHARGED CUSTOMERS FOR INSURANCE
A class-action lawsuit has been filed in the U.S. District Court in Philadelphia accusing United Parcel Service Inc. of overcharging customers for insurance on shipments, Reuters reported last week.
The suit alleges that Atlanta-based UPS is a monopoly that violates U.S. antitrust laws while engaging in unlawful trade practices to set inflated insurance charges for packages valued at more than $100.
UPS covers insurance on packages valued at up to $100 and offers customers the option of paying 35 cents for each additional $100 in value.
The lawsuit, which names Francis Farina and pharmacist Steven Merky, both of Devon, Pa., as defendants — claims the insurance charge is part of a 'sham agreement' between UPS and national Union Fire Insurance Co., under which UPS steers customers away from rival insurance policies that can cost as little as 13 center per each $100 of additional value.
The plaintiffs allege that UPS collected $845 million in insurance premiums from 1984 to 1989 while paying out $281 million in losses.
UPS told Reuters the suit was without merit and that UPS's extra-value insurance charges are the lowest in the industry.
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