B.C. man sets off class-action lawsuit against UPS over hidden brokerage fee

Discussion in 'The Latest UPS Headlines' started by ROBO MOD, Oct 24, 2006.


    ROBO MOD I'm a Robot Staff Member

    B.C. man sets off class-action lawsuit against UPS over hidden brokerage fees - CBC News

    Hidden fees seem to be an everyday irritant for consumers, but a B.C. man is so angry about a fee charged by United Parcel Service he's willing to become the point man for a class-action lawsuit.
  2. artlover

    artlover New Member

    Re: Discuss

    I work in the ODC International Dept. and I try to inform every shipper I speak to that the consignee will be charged duties, taxes and brokerage fees, based on the value they put on the customs invoice. Our customer counter tries to do the same. We are bound to forget to inform someone, but some of these customers need to take some responsibility themselves and ask questions first!

    Some of our regular shippers do indicate their choice of a brokerage company on their waybill or invoice, so what he said about that is just not true. I don't think he will be very successful with this.
  3. DS

    DS Fenderbender

    Re: Discuss

    artlover,its not your fault that they charge this fee.
    its a deal they have with the canadian government to create money for the both of them.They get 6% GST on everything and ups gets 1/3 of the price of the purchase for doing nothing. I agree with this lawsuit.Its a cash grab and its unnecessary.
  4. DaveC333

    DaveC333 New Member

    Re: Discuss

    There is no deal by anyone. Every shipment going into Canada has to have a Customs entry done on it by a licensed broker in Canada (same into the US). The fee covers the brokerage work to do the Customs entry along with a marginal profit.
    If a shipment is sent through the post, the rules are different as they are in the US post. Rules for postal entities are different for the government then they are for private industry. The post may charge $5.00 for this work but in reality the don't have to comply with the same rules, regulations and compliance as private industry.

    The class-action suit is unfounded.
  5. hoser

    hoser Industrial Slob

    Re: Discuss

    The one huge flaw is that ALL courier companies charge "hidden" brokerage fees. Difference is, UPS' is the most expensive.

    CanadaPost is $5
    FedEx Express is $7
    FedEx Ground is min. $10
    UPS is $25 for shipments over $100 (where there's a 6% sales tax charged).

    A flaw in the argument that the fee from UPS is not hidden. A courier comes to the door, says $XX.XX has to be collected, and it's paid. Refuse, pay nothing, and it's sent back. Furthermore, CanadaPost, while cheaper, processes ALL international ground shipments through Vancouver or Toronto ONLY, adding another week to transit time to certain places (like Regina or Winnipeg). Two ports of entry while UPS has at least 25 Ports of Entry in Canada.

    The line that "UPS doesn't allow customers to clear their own shipments" is complete BS. I cleared my own stuff through our centre a month ago without incident, and the call centre had no clue I was an employee.

    Unlike FedEx Ground or Purolator where you receive a bill in the mail 2 weeks after delivery. Now THAT is worthy of a lawsuit.
  6. rngri4

    rngri4 New Member

    Re: Discuss

    It's not worthy of a lawsuit actually, when you ship, you agree to the terms and conditions of such, and you also agree to additional fees incurred from such, these fees may result from address corrections and/or brokerage fees, this customer agreed to that either by signature, or simply by checking the yes box on installation of software, and frankly he/she will not have a leg to stand on in court.
  7. jokerofdeath

    jokerofdeath UPS IT

    This thread got me to this site due to the fact that I actually work in the UPS Canada Brokerage office in Fredericton. I am not a rater/classifier but helped set up and run the facility so I have a reasonable to advanced level of knowledge on the ins and outs of the Canadian import regulations.

    This suit will blow over faster than a sail boat in a hurricane.

    Firstly, CBSA (Canada Border Services Agency) regs allow any carrier that is authorized under the courrier LVS program to broker every shipment under $1600 CDN how ever the carrier sees fit. A long time ago, UPS decided to do it themselves in Canada. This is the real crux of the case as if he had a leg to stand on, the case would also have to include ALL of the other LVS carriers as NONE of them actually call you to confirm the broker of preference, including doing it yourself if you choose.

    There are no "secrets" or "hidden" anything. This is due partially to the government and UPS(And the rest of the carriers). You see, the laws in Canada do not require the carriers to educate the importer (Anyone recieving a package from outside of Canada that did not buy from an online vendor like Tigerdirect.ca). And to that, like any "good" corporation, UPS only goes as far as they have to, so they don't bother or don't put any real effort in to educating folks on import regulations. Now, short of slamming only UPS, I must remind those that are reading this that NONE of the other carriers in Canada bother to educate either.

    There are actually only 14 import locations. Most for ground and some for Air. There is currently no import location with Brown that is east of Montreal.

    And as to the complexity of import regs in Canada, the full set of regulations as published through the CSCB (Canadian Society of Customs Brokers), is so large as to consume most of a DVD.



    Re: Discuss

    artlover,its not your fault that they charge this fee.
    its a deal they have with the canadian government to create money for the both of them.They get 6% GST on everything and ups gets 1/3 of the price of the purchase for doing nothing. I agree with this lawsuit.Its a cash grab and its unnecessary.

    This is so untrue its hilarous. Do post when you don't know what you're talking about. There is no "deal" with the Canadian governement. As a customs broker (and this applies to the hundreds of customs brokers across the country) we have to turn over the 6% GST, PST if the shipment is personal and varies depending on province and duty, if applicable. We then pass those charges on to the customer, obviously! There is a Disbursement fee, which is 2.7% of the total governement charges or $5.85, whichever is greater. We are putting money out on behalf of a customer. It's no longer in the bank collecting interest. Does the bank lend you money for free???? We are also providing a service, when was the last time you got your hair cut and didn't have to pay? Services don't come for free. This is called the Entry Prep Fee.
    There is no Entry Prep Fee on UPS Express and Expedited shipments. Basically anything that is shipped Air. Just like DHL and FedEx Express, who both, by the way, charge disbursment fees as well.
    They mention that Canada Post only charges $5.00. What they don't mention is that there is a lawsuit against Canada Post brought on by UPS and also includes FedEx and DHL. Canada Post is being sued for using Governement monies to subsidise their Courrier business. A broker could not be profitable by charging $5.00 to clear a package.
    He mentions that he was not given the opportunity to choose his own broker. By law, we do not have to give that opportunity on a personal shipment. There are no brokers that I know of (and I have delt with many) that will clear a personal shipment coming by UPS, FedEx, DHL etc. As these shipments can be cleared by the carrier. There are exceptions of course, but the chances of finding a broker that will do this is unlikey.
    This lawsuit will be dead in the water.
  9. Farmer Colin

    Farmer Colin Guest

    Re: Discuss


    "The line that "UPS doesn't allow customers to clear their own shipments" is complete BS. I cleared my own stuff through our centre a month ago without incident, and the call centre had no clue I was an employee."

    How do you clear your own stuff. I called UPS brokerage center via 1800 and the lady told me that it had to be done via the port of entry that my package came in on. By that tone it could be any of the 16 points that UPS has. It is frustrating as I am to the point that I will not buy internationally if they ship UPS and I tell them that they lost a sale because of this. The extra fees can increase the cost of the item by as much as 50%. I have also had problems by trying to prepay UPS brokerage to avoid COD charges, and not have them rung through my Visa, so that I had to pay it in the end. I was supposed to get a credit for future shippments but that seems to be lost in the either.

    Us farmers are cheep, but if there is an better way around this I would like to know. I don't like the dishonest way of reduction of the value of the item to cheat the system.

    Farmer Colin
  10. jokerofdeath

    jokerofdeath UPS IT

    Re: Discuss

    And therein lies the issue that so many in Canada do not seem to understand. You have to be at the port of import IN THE FLESH. Where the port is in respect to the physical border is irrelevant. All of the bonded carriers have bonded warehouses that can be several hours from the border. The goods stay in the bonded WH until the proper requirements of the CBSA (Canada Border Services Agency) are met.

    Unless someone is not giving you the right information, the information and the requirements of clearing of a package into Canada are laid out by the government of Canada. Not by any private business.

    If you cannot be there in the flesh, then you need a representative broker that has the ability to be in contact with the package or at the least, has the ability to get at the invoice off of the package. And Customs agents DO NOT do this work. The VAST majority of brokerage companies that exist purely to broker, do not typically do personal shipments and if they did, their fees are 3 - 4 times that of what UPS or FedEx charges.

    Something that has not been posted in this thread yet is the fact that the same loonies that are trying to sue UPS are now trying to sue FedEx for the same reasons.
  11. pj57

    pj57 Guest

    Re:UPS overcharges

    I have had many items come from the states in the last few years, and even when items are marked gift, Ups still charges full duty and other charges. Even when the item is shipped prepaid, they find extra charges. an example of a used car part, made in the US, that cost $115 US, sent prepaid, marked gift but with a value declared. $46.25 brokerage, duty, GST, and Pst totalled over $75. I couldn't appeal it, because it's being handled by a contractor, and UPS does their own billing. This gift charging has happened many times, so I try to get people to ship "anything but UPS". An item I recieved on Monday, was actually charged reasonably for the first time; $22 and change for a $40US item, taxes and brokerage. Strange coincidence at the timing.
    When I called UPS about the previos overcharge, the Vancouver office told me there is no rate chart, and that they charge whatewver they feel is appropriate at the time! Also, no you can't claim bake for the gift status, you should have refused the item she said. Thanks UPS. I think brown every time I clean up after my dog.
  12. jokerofdeath

    jokerofdeath UPS IT

    The regulations on gift are set by the Government of Canada and are currently $60. If the CBSA agent believes that a package has a bogus value, they will reasses themselevs and then UPS is bound to apply the new value.

    Sorry, but yet again, the issues that people have with UPS and the other carriers and their brokerage fees are skewed heavily by the lack of knowledge on import regulations...
  13. Fred UPSER

    Fred UPSER Guest

    Re: UPS overcharges

    Rate chart is available easily to anyone with internet access.
    Rates for Customs Clearance into Canada
  14. Farmer Colin

    Farmer Colin Guest

    Re: Discuss

  15. jokerofdeath

    jokerofdeath UPS IT

    Re: Discuss

    Farmer Colin, that is exactly what you would need to do. For most this is actually going to cost more money than the average brokerage fee. Especially for folks in Atlantic Canada as the import location for almost all goods destined for our neck of the woods is either Halifax by sea or Montreal by air or land. That is a lot of gas in the ole car to avoid the brokerage fee. And when you are there, you will still have to pay the taxes and duties if they apply.

    And if you broker the goods incorrectly as a private citizen and the the CBSA picks up on it, they can come and seize the goods in question. Professional brokerage firms just have to pay a fine and you get to keep your goods.
  16. HKPolice

    HKPolice Guest

    Re: Discuss" B.C. man sets off class-action lawsuit against UPS over hidden brokerage

    jokerofdeath, stop trying to defend UPS.

    How do you explain the fact that Canadapost only charges $5-10 for brokerage fees on all items?

    Compared to UPS charging 1/3rd value of the item or more. Why does the fee vary? It all goes through the same paperwork whether it's a $25 or $250 item, why do we have to pay more brokerage for higher value items?

    Sure, you argue that Canadapost only has 2 ports of entry which delays items, but I'm sure most of us average internet buyers would rather wait an extra few days than pay these ridiculous fees.

    As for accusing other couriers, you're also wrong. Fedex doesn't charge this much brokerage, and there are no delays when they process packages.
  17. jokerofdeath

    jokerofdeath UPS IT

    Re: Discuss" B.C. man sets off class-action lawsuit against UPS over hidden brokerage

    Stop living with your eyes closed.

    I never once said that they are not. What you are either unaware of or are choosing to totall ignore is the fact that Canada Post is a former Crown Corporation that still recieves transfer payments from the Government and therefore is not responsible to actually worry about profit. They are also well capable of using revenue from stamp sales however they want.

    This is an absurd generalization. The fee at UPS is proportional to a degree but is only overkill at the low end. The fee, for instance, on a $750 to $1000 declared value shipment is only $53. That ammounts to between 5% and 7%, not this blanket statement of yours claiming 30% on all shipments.

    The process for clearing shipments into Canada is set BY THE GOVERNMENT!!!!!!!!!! PLEASE REMEMBER THIS WHEN i SAY THE FOLLOWING!!!!!

    There is a program in Canada called the Corurier/LVS program. It allows carriers like UPS and FedEx and Canada Post to clear LVS volume themselves. LVS is short for Low Value Shipment and covers shipments up to $1599.99. This value and the classification is enforced by the GOVERNMENT AND IS THE LAW OF CANADA SET BY THE GOVERNMENT OF CANADA. With this ability, the courrier can arrange for whatever method of customs brokerage they want. It can be hired out to a third party that I guarantee you charges FAR more than UPS or the courrier can get their own brokerage license and start clearing it themselves. UPS chose to do this themselves due to the fact that with UPS clearing the goods, there is no more waiting for a third party to clear the goods and cause delays on packages.
    To that note, if you are a licensed customs broker in Canada, you are required to meet a myriad of legally binding requirements. One of these is that you MUST maintain 6 + current year of ALL records in regards to ALL shipments that have come into Canada and were brokered by you. For UPS Canada, this is in the 10s of thousands per day. That can ammount to twice that in actual sheets of paper and ALL of that has to be stored somehow. For years, many did it by paper but the warehouse space for that is cost prohibitive. Even the electronic systems that almost everyone uses still costs a great deal of money.
    From that there is also the FACT that if a package is inappropriately cleared and customs discovers this, there are VERY steep fines. On the order of $10s of thousands each in some instances. If you as a private citizen chooses to clear your goods at the border and you do it wrong, the government will simply come and seize your goods and there is nothing you can do about it.

    And beyond that, there are import restrictions on all kinds of foods, textiles and animal products. All of these require permits to allow you to import them.

    And as I have said on other forums, if that is the case, then use CP instead of UPS. I do just that.

    This is just pure BS. There is also a lawsuit from the SAME firm that is worded the SAME and is leveled at FedEx. The FedEx rates are near identical to UPS. The difference is that rather than give you the chance to refuse the package, FedEx will deliver it and then send you the bill in the mail a month later. The real trick is that FedEx never goes to collections and then eats the cost regardless of it being against the law or if not at least against reasonable business practices to pay the taxes and duties in a subsidizing manner on the behalf of the importer.

    This, by the way, is something that Canada Post does ALL the time. The entire courrier industry in Canada is still suing the government for allowing CP to TOTALLY ignore CBSA(Canada Border Services Agency) regulations on importing goods.

    To wrap up, I cannot say it enough. Canada is THE hardest country in the world to import anything into. The checks and balances and the red tape is immense. If you choose to totally ignore what I have to say, then you are plenty welcome to go the the CBSA website and start educating yourself as to what the reality is on Canadian import regulations and standards.

    And if you want to know, I am an 11.5 year UPSer that SET UP the brokerage facility in Fredericton so trust me when I tell you that I am pretty freaking sure I know what I am talking about.
  18. true_1_ace

    true_1_ace Member

    Re: Discuss

    well I think UPS sets its own values for brok fees and Ive had customs officials tell me this directly,after they questioned UPS(brok dept)on this and got fees erased for there personal items.
    also why is our rates so high when everyones is at least 50% lower,
    you are right, the lawsuit will go away, even if UPS spends triple the amout on layers fees,but customers are very aware of other companies fees and soon UPS will have to do something

  19. jokerofdeath

    jokerofdeath UPS IT

    Re: Discuss

    That is correct. All carriers that are approved under the CBSAs Courrier/LVS program are fully and legally able to set their rates to whatever they deem appropriate.

    As for other carriers...

    The ONLY one in Canada that has universally low brokerage rates is Canada Post. All of the rest are either very close to the same or are notably more expensive.

    For instance, on $20 - $40 delcared value items, FedEx is only $1 cheaper than UPS. The real flaw with UPS is that there is a TOTALLY non linear increase when moving to the next value range of $40 - $100. This is the one that kills the hardest as it is a $22 brokerage charge with tax.

    In my opinion ONLY, it should be $5 for the $0 - $40 and then MAYBE $10 for $40 to $150. Another good idea would be for it to be a fixed % all the way up. So say for instance, 5% of value so that at $100 it would be $5 + tax. Considering that the charge for $1000 is almost exactly 5%, I don't believe that it would be that big of a hardship for UPS to do this. In my opinion of course :) .

    Well, the real comedy is that the suit is not even real yet. That goofy law firm is still in the petitioning stage with the BC court. When the court sees that the Courrier/LVS program allows for everything that is going on, they will have no option but to toss this puppy right out the door. If the law firm want to try anything, they need to sue the Government of Canada over what Canada Post is getting away with. From cutting service to rural addresses to anti-trust cross subsidization of Purolator from stamp revenues, there are plenty of reasons to sue CP. Not so many to sue UPS and FedEx.

    I do agree that this will most likely draw enough attention to possibly cause UPS to restructure its rates for casual importers (Meaning John Q Citizen).
  20. booger

    booger Guest

    Re: Discuss" B.C. man sets off class-action lawsuit against UPS over hidden brokerage

    There is no way to defend the hefty price tag UPS puts on brokerage. I've seen the garbage posted about how Canada Post is subsidised and therefor can charge a low price. Well what about DHL, who will allow you to set up an account to automatically pay, and thus avoid fees? Are they subsidised by the government too?. What a joke.

    Post after post of rationalization of the crazy fees charged by UPS, and the truth can be bottomlined in 3 sentences. UPS brokerage fees are a scam - no way around it.