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United Parcel Service Sued for Insurance Fraud
Is0t0pe writes "It seems that UPS might have been taking all that money we spend for insuring our packages and funneling it into an offshore company owned by UPS shareholders- Here's the scoop." The story's from SmartMoney.com. An interesting tale of alleged financial manipulation that affects anyone who's ever insured a UPS package for over $100.
As the article states, OPL is "Overseas Partners, Ltd." .. when the stock was private, every time you purchased shares of UPS stock, you also had to purchase a certain amount of OPL stock. This was mandatory if you wanted to buy UPS stock.
OPL was known to my co-workers (middle management) as the company that provides package insurance. I remember hearing something about UPS starting it up and spinning it off years ago.
Wish I could provide more info. Thats all I remember about UPS and OPL. I wasn't involved in package systems.
Using your sig line to advertise for friends is lame.
If it doesn't affect your payout (as in, *all* of the money is invested and they won't compensate you for damage), I don't see what right you'd have to object.
The objection is in the level of assurance for that potential payout. For example, all 5 of Timothy's Overnight Delivery's trucks collide in the parking lot, and are a total loss. TOD now goes bankrupt, and has no special structuring to assure proper payout of the damages on the packages, and the customer is in the lurch.
In order to avoid scenerios like that, various states have strict licensing policies on who can be an insurance company, and how much risk they can assume. The requirements are set up so that if an insurance company is getting into trouble, it gets shut down BEFORE it becomes unable to pay it's claims.
In this case, nobody has gone bankrupt, and nobody didn't get paid as a result of insolvency, so the damage is minimal. Basically, everyone 'got lucky', and didn't even know they were at risk until now.
The point of the suit is that the customer paid for insurance (the assumption of risk for a loss) believing that the rather strict solvency rules were being followed by the insurer, and they weren't. It's like discovering that your bank had no deposit insurance, and was keeping the money in a bunch of shoe boxes out back.
For the record, I doubt it's worth $42 billion in damages precicely because no actual harm was done.
This is just my IANAL understanding so I may be off. But the crux of it seems to be that:
- UPS used to self-insure it's packages until 1984.
- Rather than face all the strict laws regulating the insurance biz, they got out and started using a company called National Union Fire to insure their stuff. No problem there.
- National Union Fire re-insured (insurance companies back themselves up with re-insurance to spread the risk) with a company in Bermuda. No problem there.
- The Bermuda company was owned by some private stock holders of UPS. This is a problem because since they own a major stake in UPS and the Bermuda company it amounts to being self-insured.
- Because UPS was now self-insured again (albeit in a round about way) they should have paid taxes on the profits of the insurance side. So they basically ripped off the government for a few billion.
- Again, since they were self-insured they were operating as an unlicensed insurance company. They were selling you insurance but they weren't licensed to do so. That is insurance fraud and a huge no-no in Ohio and probably every other state.
So that's my take anyway...According to CNN and stuff, the suit is based on UPS charging for package insurance (which is optional last I checked) even though they were self-insured. And in 1984, UPS outsourced their incurance. So, is this suit for charges before or after 1984?
I still don't get what they did wrong. Okay---so they are putting some of the money offshore for tax reasons and uncle sam's getting them for that (and I still don't see anything wrong with the offshore deal - screw the IRS!)
I guess in my mind it comes down to one thing:
Did UPS payout for damaged insured packages?
If so, then where is the fraud? If you are not happy with where the unused money went, tough shit. If you don't like it - don't pay it.
Or am I missing something - I guess I just don't understand the government and lawyers. Only thing I see (on both sides) is greed.
> The notion of "self-insurance" is quite common for extremely huge
> organizations where they figure that they have such a huge number
> of potential sources of claims that it makes sense to keep the
> insurance money and pay the costs of claims as they come up.
Self-insurance is very common for major corporations for such things as Workers' Compensation insurance, but not quite for the reason you've stated. It's because a major company is capable of assessing only its own risk and setting the rate of money they need to set aside. Quick lesson in how insurance works, so that I can make my point:
The concept of insurance runs on two principles -- risk and indemnity. Risk is the likelihood that a loss will occur; indemnity is the principle of returning the insured to the state of being whole -- ie, taking them back to the state they were in before the loss. Often, this is impossible (ie, life insurance -- you can't bring someone back to life) and in that case, the company will compensate the insured for the loss in a monetary fashion (such as the loss of income that the deceased would have earned).
In order to have such coverage, the insured must pay for it. In order to set the premium rates, the insurance company assesses how likely it is that an insured will have a loss; they calculate the risk. Insurance companies have huge tables (known as actuarial tables) that contain nothing but demographic data and histories of loss; using those tables, they can calculate roughly how likely it is for an individual to suffer a loss. The premiums charged to that individual then reflect the amount of risk that the insured represents. This is why, for instance, a person who receives a speeding ticket will see his/her auto insurance go up; it demonstrates that the individual is more of a risk for the insurance company.
The advantage of this for the insurance company is that they have a broad pool of insureds, some of whom are in high-risk brackets, some of whom are not. The people who are higher-risk will indeed get charged more, but the people who are at a lower risk will be charged at such a rate that they are partially financing the high-risk insureds. In such a manner is the financial liability to the insurance company spread out over the entire pool of insureds. Fred Smith from Sheboygan, who has never had an insurance claim in his life, drives slowly, only goes to the grocery store on Fridays, etc, etc, is partially financing the insurance company's ability to assume the risk for Jane Doe, who drives everywhere at 90 miles an hour and has had her license suspended six times for careless driving.
Major corporations, however, find the process of partially subsidizing other companies' insurance distasteful. Looking at workers' comp, it's easy to see that an automobile factory would have a much higher assessment of risk than a sedate law office. To this end, companies are permitted to self-insure as long as certain conditions are met. In my example, let's say that the law firm of Dewey, Cheatem and Howe chooses to self-insure for their workers' compensation coverage. The amount of money that they need to set aside for potential claims would likely be much, much less than they would need to pay an insurance company for the same coverage, because they would likely have a smaller range of possible losses, and thusly less risk.
So basically, I'm just nitpicking your assertation that a company self-insures because of the number of claims; it's usually because of the nature of the claims involved.
In the UPS case, it appears that it might indeed have been detrimental to the consumer. In most of the cases where self-insurance is permittable, it is on an internal basis; the company is insuring itself against certain risks incurred by the company. In the UPS case, it appears that self-insurance was a roundabout way of saving the company money and evading US tax and insurance laws. The clouding issue is the fact that UPS was not directly insuring itself, however; it was using reinsurance.
Reinsurance is another mechanism that the insurance companies use to reduce their own potential liability. The example that my insurance instructor gave me was a basketball player insuring his hands for $20 million. That is a very large risk for the insurance company, and a claim on such a policy could cause the company immediate financial distress. In order to protect itself, the company will often purchase insurance for itself with other insurance companies, thus diversifying the risk -- XYZ Insurance, who has written that $20 million policy, would then go to ABC Insurance and take out a policy for $1 million, to DEF Insurance and take out another policy for $1 million, etc. That way a sudden claim will not cause a catastrophic drop in the original company's general fund, the account out of which claims are paid.
Reinsurance is a very common practice in the insurance industry, particularly in the property and casualty insurance market (auto, home, liability), because of the possibility of natural disasters that affect an entire area. For instance, a company that insures large blocks of Florida, say, might purchase reinsurance for itself in a company that doesn't have much business written in Florida at all. That way, a natural disaster in Florida wouldn't bankrupt the company. The company I work for was heavily involved in the area that was hit by the Oklahoma tornado a while back, and the only thing that saved our P&C department was the fact that we had a great deal of reinsurance and therefore did not need to pay all the claims ourselves.
In this case, UPS appears to have purchased its insurance with a standard insurance company, and then that company purchased reinsurance with the company UPS owned. This is going to make things a little stickier.
Disclaimer: I am an insurance agent, but this is not insurance advice. See your local insurance agent who is familiar with your state laws for any specific insurance questions.
Signing on paper is not an option. Their mandatory system of digitized signatures raises a lot of privacy and evidentiary red flags.
Also, UPS has done some pretty bad things to computer equipment I have had shipped through them over the years.
So, I just say "no" to UPS and ask vendors for an alternative. USPS is usually a better deal, and FedEx is more reliable in my experience.
Do we care where they hold the insurance? To me, if the parcel arrives in three pieces, they will pay for it. Or not. Depending on whether it was "insured".
Do I care where they keep the money in the meantime?
I'm not joking. Every experience with UPS I have ever had was extremely bad.
One, they don't really operate in Atlantic Canada where I live, even though their main call centre is in Moncton, NB. They handle it through garbage local companies (here, it's sameday (someday) express). Surprisingly enough, they won't even let me insure something I send from here.
It took me over a month to receive a laptop I bought. It came broken so I called up the company for a replacement and decided to get another one instead. I asked them to send it via Purolator or FedEx and that I would pay the full shipping costs. Nope. UPS had them in a contract that they were not allowed to use other services even though the customer is paying for it. Sound familiar?
Matrix Orbital (It's sad to say this), who makes cool LCD displays for Linux boxes, has signed one of these contracts. I worked for a company that needed one overnight. FedEx or Purolator would have done it, but UPS wouldn't. It was UPS or nothing and it took a week to get.
That not only sucks, it should be illegal. I'm paying for it, shouldn't I get a choice?
When I sent my laptop back, not only would they not insure it, but they didn't give me any kind of receipt. Egghead couldn't reimburse me the the CAN$200 without the UPS receipt I didn't get. UPS refused to give me a receipt no matter how many times I called them ("there's nothing we can do", BS, they lost their records???).
That's why this story doesn't surprise me. UPS are dickheads, and they always were in my experience.
I'm not sure here, but it sounds a little bit filthy to do a self-insurance for a job one company does for a third person.
I mean it's bad for the customer, in case of self-insurace and a suit about a broken package, the plaintiffs were the same as the defendand.
My chances of getting the money should be worse compared to the "legal" case when UPS would be a "neutral" plaintiff because a independend insurance company was sued by me.
When ibm or your company go bancrupt no one else is hurt because they can't pay some repairs for fire or an accident.
Nerds are interested in all kinds of things. There is no reason to believe that a certain subset of the readers of /. might find this interesting and relevant. That's the beauty, of course - you can choose to read what you want. If it's not relevant to you, feel free to skip it.
...phil
...phil
"For a list of the ways which technology has failed to improve our quality of life, press 3."
Fradulent in terms of "company was actually self insured, and just trying to be sneaky and pretend they weren't?"
There was a direct writer which was licensed to write the insurance. That company (National Union Fire Insurance, a co-defendant in the suit) was the insurer. They chose to reinsure the business back to an insurer owned and controlled by UPS. They are perfectly within their rights to do so.
I understand that the general public dosn't understand the difference between insurance companies and reinsurers. If you have insurance, that changes are very great that some company that you never heard of holds part of the risk. Reinsurance is commonly used in insurance to spread the risk of too many claims around a larger group of companies.
That company (the reinsurer) does not need to be licensed in the state where you bought the insurance -- this is one of the bogus claims of the suit. You have no relationship with or claim against the reinsurer in the event of a loss. If the reinsurer becomes insolvent and can't pay its claims, you aren't out a penny. The direct writer, with whom you have a contract, is out. They still owe you for the claim.
Yes; the courts have already decided that. This suit is a result of that decision, not a speculation hoping to achieve that decision.
No. Please reread the article. The company was convicted of tax fraud because of the way that they structured the overseas reinsurer. They apparently attempted to avoid paying Federal Income Tax on the underwriting profits. The court decision does not prove fraudulent dealings with insureds.
Frankly, this is a nuisance suit which has no basis in law. I would be very surprised to see the plaintiffs prevail.
I have discovered a truly marvelous sig, unfortunately the sig limit is too small to contain i
I say you shouldn't have to buy insurance on a package in the FIRST place.
You don't pay a waiter not to spill your drink on the way to your table! Sure, you tip him, but if he spills it, it gets replaced, without INSURANCE.
"Hi, UPS? How much extra does it cost for you NOT to break my stuff?"
First off, this story is the abridged version, but the essential facts have been preserved.
So I've got a 2 month old Epson printer that has gone bad. Epson replaces it under warranty by cross-shipping me a new one, and I am suppossed to put the old one in the old box and let UPS come pick it up. I do so, then I leave town for a week.
I get back, I call Epson to make sure they have received the broken printer (and thus won't be charging my credit card for the new printer). They have not received it. I call UPS, they have a record of picking it up, but nothing from there. They put a trace on it and will get back to me in 10 days.
10 days come and go, I get a letter from UPS saying that the results of the trace are that Epson did receive the package, they even have a copy of the digitized signature of the receiving person at Epson to prove it. That same day, the printer is uncovered at my local Mailboxes Etc, UPS had misdelivered it back to my mailbox and it had been sitting in storage ever since.
Clearly the printer was never received by Epson, and clearly UPS abused their digitized signature system to avoid paying on the insurance they owe Epson. They just printed up a copy of the signature captured for some other package and said that it was for the printer they never delivered.
Not only that, but they told Epson the same thing and Epson accepted it, assuming that they had lost the printer in their own internal returns system. So now I still have a broken printer, but I have a working one too. Epson doesn't care, and despite a number of calls to UPS, they've done an excellent job of ignoring me.
So, beware when you sign on that digitizer pad, who knows what nefarious game UPS will play with your signature.
Part of this is certainly related to how they are handled. Boxes obviously containing computers are thrown several feet and land harshly on a conveyor belt. Imagine picking up your computer and your monitor and throwing them as hard as you can against the wall. This happens... hundreds of times a night. Any item shipped through UPS will probably be handled at least 8 to 10 times, and each time it will go through the same level of treatment.
Why doesn't this surprise me? Because the company I used to work for shipped a computer from AZ to my office in MI. The clueless moron who shipped it packed it in a box that was filled only with shredded paper.
When it arrived, this thing looked like someone had played football with it. Both the CPU and monitor case had been broken/cracked...the monitors case had a hole big enough to stuff three fingers in!! It was a frickin' miracle this equipment worked at all!
My journal has hot
FedEx has a new ground service that is cheaper than UPS 2-day.
Their ground services will certainly continue to expand.
FDX (the parent company) also owns RPS now, which is probably UPS' biggest competitor in the day-specific (as opposed to time-specific, which is FedEx's bag) market.
For an example of how this works that is maybe a little more relevant to the /. crowd, remember when Prodigy was the #1 online service? They were cheaper than AOL, and much more popular. But they weren't making any money; so they instituted a pricing structure more like AOL's. Did AOL say 'hey the competition raised prices, so can we?'. No. They lowered their prices. The rest, as they say, is history.
Like we'd say when I worked shipping and receiving...
;) )
"...ooops!"
(disclaimer: here in Brattleboro, Vermont, FedEx sucks worse and UPS has been pretty good. Not that I've tried to insure anything, mind you
...
UPS successfully pulls off biggest IPO in history. Money making lawsuit is filed. The American capitalist Legal system in action.
from the article
According to the lawsuit, UPS, registered as a corporation in Ohio and New York, acted illegally as an unlicensed insurance company, which seeks to invoke Ohio's Corrupt Activities Act.
So they became their own insurance company. Good for them. They still covered you if your package got lost, they just did it in a different way. I wonder how much money they save in paperwork? Silly lawsuit, but still a good reason (like you need another one) to invest in FedEx (no association)
+&x
There is nothing phony about Bermudan Insurance companies. Many corporations form Bermudan reinsurance companies because the minimum capital necessary to form an Insurance company there is less than that required in the US.
The Bermudan company was not the direct writer of the insurance. A company, licensed to do business in each of the states, was the direct writer. They reinsured the business to the Bermudan captive. The arrangement is perfectly legal.
It does appear that they also used this offshore corporation to avoid US taxes. That is illegal, but it dosn't make the entire arrangement fradulent.
I have discovered a truly marvelous sig, unfortunately the sig limit is too small to contain i
I wonder where all of /.'s radical capitalists are when a story like this comes on.
Buying FedEx.
+&x
No,no,no he's buying 1000 $1.99 CDs, spraypainting LinuxOne on them, shipping 'em off to China (insured by UPS (wink,wink)), and going for an IPO.
+&x
OK: Let's say that you want to ship a package via Timothy's Overnight Delivery. (Me ;) )
If I take your insurance money and invest it in a lucrative (or even semi-lucrative) venture, but keep enough in reserve to pay you off if I damage your shipment, guess what? It means I can take less in premium for the same size potential payout than if that money were going to just sit still and do nothing.
So if 5$ gets you $1000 worth of coverage (or whatever), from whatever carrier, the use the money's put to between when it leaves your hand (you're billed for the level of insurance coverage you select) to when you collect (in the event ot a mishap) is bookkeeping, one way or the other. If it doesn't affect your payout (as in, *all* of the money is invested and they won't compensate you for damage), I don't see what right you'd have to object.
Take your logic just a step further - would you make the same demand about the shipping fee itself you make about the insurance money? (that is, that all the money you put toward shipping *must* be used for shipping expenses)? Well, UPS has advertising, marketing, brown shorts, brown paint, probably bribes in some places etc etc to pay in order to effect their shipping system as a whole. Not to mention computer systems. If they invest some of the insurance money, it just seems like good business, and hopefully allows them to trim certain more visible costs.
just thoughts,
timothy
jrnl: http://tinyurl.com/c2l8yr / foes: http://tinyurl.com/ckjno5
While their customer service people are delightful, Amazon's shipping people leave a little to be desired. They do not seem to understand that "USPS" is different from "UPS", which is a shame since my instructions to "send it via the US Postal Service, NEVER through UPS" get reduced to "USPS" and the idiots send it via UPS.
I guess I wouldn't care either if I got paid as poorly as the average line worker, but still.
Remember that what's inside of you doesn't matter because nobody can see it.
UPS and its clones FedEx, DHL, and Airborne are absolutely key to the emerging economy. They are the third leg of the Internet commerce triad. The first leg is the connection between the consumer and the service provider or retailer. Today this is the web. The second leg is the information system at the retailer, including their web site and thier inventory system. The third leg is the delivery of the goods to the consumer. That is where UPS comes in.
Note that this is basically the same model as mail order commerce, just with a different transport for the first leg. Hence UPS is also vastly important in that sector.
I think people underestimate the importance of UPS to the Internet. It is absolutely key. Certainly, it could be replaced by another delivery company, but the problem of trust still remains.
-jwb
Wait, where's my receipts? Hmm. $0.70 here, $1.20 there... Somehow I don't think I'll be participating in the class-action lawsuit.
Seems like another group of people trying to make money off of the American legal system. Like an earlier post said if it gets there broke they will replace it. No one said the customer had to buy the insurance on the package. I don't think they push you into buying the insurance, so what if it is used off shore, isn't that legal? If it wasn't I don't think that they would have done it. This will probably fly so that others can make money in the future. I'm going to see Hostess because Twinkies(tm) made me fat. It's absolutly absurd and well that's my 1/2 cent.
Good is never enough, when you dream of being great!
Just to start, I believe this story is perfect for Slashdot because I can probably say that good percentage of the Slashdot community has used UPS in some form or another during their lifetime. Anyway, I have one question for UPS: Have you lost your MINDS?? The money that people fork out to insure expensive parcels really adds up, because SO MANY people send stuff via UPS every day! People don't pay the money to finance some other operation - it's a guarantee that if their shipment doesn't make it in one piece, they'll be reimbursed.
My mother is a clerk with the USPS - been working there almost as long as I've been alive. I've learned a lot about the mail system from her. They also have a similar insurance system for those who send valuables through US Mail. Well, a certain postmaster in a certain town decided they wanted to skim off money, so they took the money paid for insured shipments, didn't insure the items, used the cash to purchase USPS money orders, and flew. They was nailed, though, hardcore. This isn't too terribly different from what UPS is doing, except it's on a corporate level.
Personally, I'd love to see UPS burn for doing that. The money I pay to insure parcels better go to insure the parcel, and nothing else. Fraud is not a light issue in any sense.
UPS circumvents the insurance problem by calling it a "declared value." When you ship a package it is automatically given a value of up to $100. You can pay a surcharge to have the package declared at a higher value, but this is NOT insurance. The extra you may is in the event of damage caused by UPSs negligence then you can claim up to that amount.
If you build a PC and send it to a relative in that corrugated box you got with the case and the PC ends up damaged, you will NOT be able to claim because it's considered improper packaging.
If you build a PC and send it to a relative with a double-box, two inches of packaging between the component and box wall, and it ends up damaged because it was thrown from a conveyor belt unto the back of the package car, you will often NOT be able to claim because UPS will say that there's no visible damage to the box, even though all your components are jarred loose.
In the event that you receive a package from UPS and it ends up damaged it's best if your refused it outright. Failing that, keep all packaging and call immediately.
If an insurance company charged equal to what it really cost them to insure their customers, they wouldn't be around for very long.
This is incorrect. Auto insurance companies, on average, pay OUT about 101% of what they receive through premiums. Where does the profit come from? Investing the money you pay in premiums. That's why they make you pay all sorts of fees if you decide to go with a monthly plan - to make up for the money they won't make by investing your premium up front. (This is true for auto insurance, I don't know about other lines.)
Personally, when I say my money is going to
/.'s radical capitalists are when a story like this comes on.
insure a package, then I expect it to go insure a package.
Didn't you get the insurance? You've got the coverage, you saw the premium before you chose to send the package. You must have thought the premium reasonable or else you wouldn't have paid for it.
You've never been overcharged for insurance? I guess you don't buy much insurance. Have you ever bought an extended warranty? Have you ever bought credit insurance? Have you ever bought insurance in connection with a rental car?
Whenever you are in a situation where you don't have a choice of insurer, you *will be* overcharged. It's just like walking up to a random pay phone and making a credit card call by dialing 0.
In a free market, you have the choice to take or decline the insurance or to use a different carrier.
I wonder where all of
I have discovered a truly marvelous sig, unfortunately the sig limit is too small to contain i
The connection to the customers, on the other hand, seems rather more tenuous. Reading the article, it indicates that
The notion of "self-insurance" is quite common for extremely huge organizations where they figure that they have such a huge number of potential sources of claims that it makes sense to keep the insurance money and pay the costs of claims as they come up.
For instance, it is reasonably possible that IBM doesn't insure their buildings against fire damage. If they did, they might pay $100M per year for the insurance, and with the diversity of their real estate holdings, they might find that paying for fire repairs out of their own pockets would only cost $70M. Note, that means that it's cheaper for them to pay for repairs after some big fires.
Similarly, my own employer requires that if employees rent cars when travelling that we not pay LDW insurance; that costs $15-odd dollars per day, and with 120,000 of us, that can add up to Rather A Lot. It's cheaper for them to "self-insure," salting away some portion of the $15/day, and paying collision repairs directly on those occasions when accidents happen.
UPS appears to have been doing the same thing; they kept the "insurance" fees and paid for losses when losses were incurred.
It appears that once the case hit the tax court, lean and hungry lawyers noticed the case, and perhaps decided that they could probably confuse a jury into believing that self insurance is effectively a way lf "defrauding consumers."
If you're not part of the solution, you're part of the precipitate.
I work on the part time midnight shift at one of the major UPS hubs. Since I only work as a package handler, I haven't quite figured out the whole system yet, but I do see how packages are handled, and what shocks me the most is the fact that packages make it through the system in as good of condition that they do. Packages are frequently thrown, kicked, dropped, spilled, knocked open. Every location in the building has several rolls of tape handy to tape up boxes that open up.
:)
Part of this is certainly related to how they are handled. Boxes obviously containing computers are thrown several feet and land harshly on a conveyor belt. Imagine picking up your computer and your monitor and throwing them as hard as you can against the wall. This happens... hundreds of times a night. Any item shipped through UPS will probably be handled at least 8 to 10 times, and each time it will go through the same level of treatment.
To compound the problem, customers don't bother, for whatever reason, to properly pack their packages. Any box you ship through the UPS system should be able to handle several hundred pounds of weight without crushing it. Dont' send a half empty box through the system. You'll get a huge wad of tape at the other end. Don't put something that is fragile, mark it as fragile, then put it in a thin cardboard container and expect it to survive the shipment. It won't. Expect that anything you ship may be dropped from 8 feet off the ground and land on a concrete surface. Expect this to happen at least 3-4 times before it reaches its destination. Package accordingly.
If something absolutely MUST make the trip intact, there are some things you can do to increase the odds of success. There are 2 main categories of packages. Regular packages which get thrown on the conveyor belts, and Irregs, short for Irregulars, which are defined as one of the following:
- Anything over 70 pounds.
- Anything longer than 6 feet.
- Anything wider than your arm.
- Anything in a non-typical container that is too large to fit into a totebox. Tote boxes are about 2'x2'.
If your item complies as an Irreg, it will not go on the conveyor belts and will be handled separately. The safest way to ship something fragile is to encase it in a regular box, fill that box with an excessive amount of peanuts, excessively tape the box, then enclose the entire box inside a wooden structure that 3 people can stand on without breaking. This means that your package wont' get crushed, punctured, thrown (too damn heavy) or dropped (won't get far off the ground). This WILL cost more due to the extra weight, but your package will make it.
I know, that sounded excessive. But I see a LOT of packages packed this way, and they make it intact. Another way to prevent problems is don't put a whole bunch of small boxes inside one larger box, then leave a lot of empty room inside the large box. This has to be the most idiotic thing I have ever seen. You end up with a box that is too heavy to go on the belts, so it gets handled separately, but since its so heavy , it ends up on the bottom of the pile, so it gets crushed and torn, and eventually the items inside the box might get separated and God only knows what might happen to them then.
Another thing you might wish to consider is the fact that some packages leak. A lot of liquids get sent through UPS in one fashion or another. We have paint, ink, chemicals, lubricants, bull sperm (no, I'm not kidding), and many other mystery liquids in various containers, some more sturdy than others. Sometimes these things leak. Enclosing your items inside a plastic bag INSIDE the box isn't bad idea to safeguard against this.
Tracking of packages is also an interesting art. Packages get scanned everytime they get loaded or delivered, and sometimes when they're sorted. Customers use this to find out where their packages are. Customer service uses this to help find lost packages, security uses this to track possible thefts, sorters use this to make sure the sorter actually LOOKS at the label to make sure its going to the right place, and loaders do it because one of the above told them they had to.
Nevertheless, many packages don't get scanned at every point, and laziness is usually the reason. Tracking should be used only as a guide, but not for anything specific.
As for insurance, which is the topic of this whole discussion after all, I don't really know if this game should be considered fraud or just an elaborate loophole. As far as I'm concerned, if the company they do their insurance through is licensed, then they have that ground covered even if UPS itself indirectly owns the insurance company. And if taxes were incorrectly assessed, well, thats a different issue, but I don't think it affects how people were charged or overcharged for insurance. Insurance is a voluntary thing. Its a gamble. Pay a little or risk losing your package. If UPS doesn't honor its insurance claims, then that too is another issue, but if you ship a package, pay insurance on it, the package arrives intact, then you have nothing further to argue. Just be happy it made it in good condition, believe me, its one lucky package.
-Normally not anonymous, but who knows who's watching.
I'm still not entirely sure what it is they say UPS did that was wrong (although I've always thought it was silly to have to pay extra to have a shipping company pay me if THEY break my stuff).
What I don't get is how the plaintiffs think they were defrauded. They pay the cash, if UPS damages their package, UPS reimburses them. It seems straight forward. If UPS bought a Bermuda company, they insurance was still payed out.
But......$42 billion (the figure if it becomes a class action suit) for 20 customers? If UPS took in $100 million (as they did in '84) in insurance every year for 16 years, that's just 1.6 billion for ALL UPS CUSTOMERS! How do they figure UPS should have to pay $42 billion to 20 of them. (BTW there's a Bill Gates joke in here somewhere, but I can't quite think of it...)
Dana
A co-worker of mine has a second job at the Philadelphia UPS hub. (we work for an academic institution, so we tend to collect side jobs). She says that breakage is a regular thing. Re-packing into other boxes, or slapping some tape on the side and claiming that it arrived that way is standard operating procedure. Which is a bummer, because that means one fewer reliable shipper. But after talking to her, I'm never shipping anything irreplacable via UPS.