RICO Class Action Slams Federal Express

MANHATTAN (CN) - A RICO class action claims that FedEx overcharges customers by "upweighting ... a labyrinthine and corrupt billing model" that brings FedEx "many millions if not billions in dollars in overcharges" from the 3.5 million packages FedEx ships each day.

Lead plaintiff NYBikerGear claims FedEx cheats customers in three ways: through "upweighting;" through a "Canadian Customs scam;" and by failing to apply discounts properly.

"In the 'upweighting' scam, the defendants have manipulated their information technology so that it rates small packages at a fictional higher weight than the actual package weight," according to the 33-page federal complaint. "The higher weight, in turn, automatically results in the assessment of higher rates and surcharges for these packages."

In the "Canadian Customs scam," the complaint states, "the defendants have billed their customers for Canadian Customs duties and related charges on FedEx Ground shipments from the United States to Canada. The defendants knew such charges were to be paid by the Canadian recipients but instead misrepresented to customers that such charges could not be collected from the recipients."

NYBikerGear claims that FedEx invoices "set forth the improper Canadian Customs duties, taxes and related charges payable in connection with FedEx Ground shipping services" and claim, falsely, that "all amounts due on these invoices were lawful and appropriate charges."

Finally, the class claims, FedEx "also issued invoices that failed to apply applicable discounts to FedEx Ground shipments billed to the FedEx billing numbers of its customers."

The class claims that FedEx does not abide by its pricing agreements, which give customers discounts when they ship packages with a FedEx billing number.

The class seeks declaratory judgment, an injunction, costs and treble damages for RICO fraud. It is represented by Michael Paleudis of Putnam Valley, N.Y.

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