Lawsuit Claims FedEx Overcharged Customers for Years

Dec 12, 2012 8:02 PM  By

Bloomberg.com is reporting that an email within an unsealed class-action lawsuit against FedEx is alleging that the shipping company has been overcharging many of its commercial and government customers at higher residential rates.

According to Bloomberg, the lawsuit is claiming that FedEx Corp. and FedEx Corporate Services Inc., overcharged some of its customers “as much as $3 each for millions of packages delivered.”

The Wall Street Journal states in an article that the most basic residential surcharge FedEx assesses with each shipment increased in January 2012 from $2.50 to $3 in January 2012.

Bloomberg is reporting that the internal email was written by Alan Elam, a company sales executive, in 2011, which said “I have brought this to attention of many people over the past five or six years, including more than one managing director, and no action has been taken to address it.”

The plaintiffs in the lawsuit, according to Bloomberg, claim that the Memphis, Tenn. based FedEx violated federal civil racketeering laws and are seeking “three times the amount of the alleged overcharges in their lawsuit.”

In an interview with Bloomberg, Steven J. Rosenwasser, the attorney who represents the plaintiffs said, “We allege that FedEx has and continues to engage in a pattern of intentionally charging its customers residential delivery fees for deliveries to obviously non-residential addresses such as courthouses, government offices and banks.

Some of the companies that the lawsuit claims were overcharged, according to Bloomberg, are the U.S. Citizenship and Immigration Office, Bank of America Corp., Toyota Motor Credit Corp. and the National Passport Processing Center.

Bloomberg states that the lawsuit is also asking for an injunction banning FedEx from “charging commercial customers at residential rates.”

In an email to Bloomberg, FedEx spokesperson Sally Davenport said, the unsealed emails and other court documents do not tell the complete story. She also told Bloomberg in an email, “We will continue to defend these allegations in a court of law and not the media.”

Erin Lynch is the associate editor at Multichannel Merchant. Erin can be reached by emailing her at erin@multichannelmerchant.com. You can also follow her on Twitter at @LynchMCM or on LinkedIn.