May 8 2007 10:38 AM

San Francisco, CA-- Shipping giant UPS (NYSE:UPS) was hit with a proposed class-action lawsuit claiming the shipping giant routinely uses an inaccurate measurement system that causes tens of thousands of account holders to be back-charged for higher shipping rates.

According to the complaint filed by the law firm of Hagens Berman Sobol Shapiro, a UPS customer measures packages and then ships the package to UPS where the company re-measures the package using what the suit claims is inaccurate techniques and back-charges the customer for the difference.

In the complaint, UPS account holders argue that since the re-measurement process occurs at UPS facilities, they have no ability to argue the revised measurements, nor do they have the ability to reassess the additional charges.

According to attorneys representing the proposed class, the problem is widespread costing UPS six digit account holders millions of dollars in back charges.

Steve Berman, managing partner of Hagens Berman Sobol Shapiro says that his clients are most upset with their inability to dispute additional charges.

"The packages are reassessed in an external location where owners can't see the process or results, he said. "This reminds me of the old trick of the butcher placing his thumb on the scale. Back then though at least you could see the scale."

The accuracy of the laser technology UPS uses to measure packages has long been suspect, the compliant notes, citing complaints by trade associations that represent franchise owners.

The laser measuring system used at UPS has not been approved by any state Weights and Measures Departments, the complaint notes, and any calibration or adjustments are completely under the control of UPS.

"Our investigation has show that this may be a very widespread problem at UPS, not just with franchises, but also with the shipper's largest corporate customers who compute charges in-house and online before shipping to UPS," Berman added. "When you ship 15 million packages a day adding a few bucks to each package can quickly add up to millions."

The suit was filed in
San Francisco in U.S. District Court on behalf of named plaintiff Persepolis Enterprise. If certified as a class action, the suit would represent the named plaintiff on behalf of all UPS account holders worldwide including UPS Store, Mail Box Etc. and companies that are account-holders with UPS.

The complaint states several counts against UPS including breach of contract, fraud and unjust enrichment. Within those claims UPS violated the contractual agreement between the company and individual franchises and account holders stating that UPS had no right to charge for alleged mismeasurements. UPS also failed to use accurate, properly calibrated and tested machines as promised in its obligations to franchise owners.

The suit is seeking damages for all UPS account holders. A small sampling of the plaintiff's additional charges range from $3.52 - $31.43 per package and that is only a very small number of the thousands of charges it has incurred.

"UPS has an obligation to its customers to deal fairly and in good faith, "said Berman.

According to the compliant UPS is one of the most recognized brands in the world and has become the largest package delivery company. The company's focus is enabling commerce worldwide and has grown into a $42.6 billion business since its founding in 1907.