What can Brown screw from you?
Two former UPS franchisees accuse the worldwide delivery service of telling employees to lie about the size and weight of packages in order to jack up prices on unsuspecting customers.
Brothers Robert and Thomas Hagan, who owned and operated 11 UPS stores in Manhattan, claim in a federal lawsuit that a typical scam was to “add inches to the sides of measured boxes,” as well as an “enhanced declared value,” which allowed clerks to charge customers more.
For example, a package with a length, width and depth totaling 26 inches would cost $106.85 to overnight from New York to Pittsburgh, but a 29-inch package would cost $117.19. In some cases, customers were overcharged as much as 400 percent, legal papers allege.
“It’s pretty ugly,” said Steve Savva, the Hagans’ attorney. “It seems to be systematic, and the customers have no way of knowing.”
The Hagans allege in court filings that The UPS Store, a subsidiary of the publicly traded United Parcel Service, was responsible for violating “the covenant of good faith and fair dealing” by:
• Telling customers that ground delivery could not be guaranteed and would take longer than it actually would, in order to entice them to buy expensive, guaranteed air delivery.
• Concealing the cost of cheaper shipping services.
• Charging customers fuel surcharges for air delivery, even when packages weren’t shipped by plane but by truck.
Videotapes offered as evidence show UPS Store employees cheating customers, the court papers allege. In one hidden-camera recording offered by the Hagans, an undercover private investigator is seen talking to a clerk in a Times Square shop who pushes more-expensive air service when cheaper, guaranteed ground service is available for half the price.
“Ground is never guaranteed,” the clerk says — a claim contradicted by UPS’ own website.
The Hagan brothers operated 20 percent of the UPS Stores in Manhattan until this past February, when UPS yanked their franchise deal.
That same month, the company filed a suit against the Hagans alleging breach of contract, trademark violations and $200,000 in unpaid fees.
The brothers claim UPS went after them because they blew the whistle in November on fraudulent practices being pushed by Manhattan executives of the company.
The brothers — who had eight years remaining in their franchise agreements and whose stores raked in approximately $6 million annually — are seeking more than $50 million in damages.
The Hagans’ April counterclaim and its allegations are simply “being made to distract from The UPS Store’s own claims against the defendants,” said UPS spokeswoman Chelsea Lee.
“We have policies and procedures in place to prevent inconsistent or improper billing discrepancies, and also conduct ongoing training and communication to ensure these policies are being adhered to,” she added.
But lawyer Savva said, “My clients brought to light fraudulent and deceptive practices involving consumers. As a reward for their deeds, their pleas were ignored, they were retaliated against, their franchise agreements were terminated and everything they worked to build was destroyed.”