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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.
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.
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
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.