Beware of Deceptive Insurance Practices of UPS
Attention holiday shoppers! When a consumer ships a parcel using the United Parcel Service (UPS) and pays for the shipping cost plus any insurance, common sense tells you that the consumer is the "shipper." But that is not how UPS views the transaction. UPS considers the "shipper" to be the party with an account with UPS: the outlet store where the consumer mailed the package.
If the package should arrive at its destination in a broken or damaged condition, UPS will reimburse neither the recipient nor the consumer who shipped the item.instead, damage claims, if approved, are paid to the outlet store with the UPS account. Often these outlets will be places like "The UPS Store" or Office Depot.
Most consumers would consider this practice to be highly unfair or fraudulent. Consumers pay for the cost of the shipping, they pay for additional insurance in some cases, and when they suffer losses due to UPS's negligent handling of their packages, the company denies any liability to the consumers for its guaranteed $100 insurance or additional insurance the consumers paid.
A typical e-mail response from UPS reads as follows after a consumer writes UPS through its Internet web page and demands payment of insurance proceeds for his damaged goods.
"Thank you for your inquiry. I apologize for the inconvenience caused in this matter. We have notified the shipper of the results for this claim. Claims are finalized with the shipper only. Please contact the company or party that sent the package for final resolution. If the shipper has any questions about the claim, please have them contact UPS directly. If the package was shipped using an Authorized Shipping Outlet or Commercial Counter they are considered the shipper of record."
If the shipping outlet is just across town, then in theory the consumer can drive to the outlet and demand his payment. Even then, there is no guarantee that the customer will receive payment. But what if the outlet is located in another state, e.G., if the consumer bought an item over the Internet on eBay or from some other vendor? Then the consumer is completely at the mercy of the shipping outlet in that state as well as the vendor to turn over the insurance proceeds to the consumer.
If the consumers paid for the shipping and paid for the insurance, then arguably they are parties to the shipping contract, or in the very least third-party beneficiaries of any contract for shipment between the shipping store and UPS. But UPS does not see it that way. The company deceptively offers insurance to the public through its shipping outlet stores and then will not even inform members of the public if the claim has been approved. Furthermore, UPS will not pay damage claims directly to the consumer who shipped the item.
It seems like the only way to resolve this dubious corporate practice is for consumers nationwide to sue UPS each time an item arrives damaged and ask courts to rule whether the policy of paying proceeds only to the shipping outlet is deceptive and fraudulent. With enough lawsuits and legal costs, UPS will eventually get the message that the consumers are its customers, not the shipping outlets, and UPS will refrain from fraudulent payment practices designed to induce consumers to use their service by pretending insurance payments will be made directly to consumers.
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