Fedex Insurance / Signature Scam

It sure seems like a scam to me. I feel like I was scammed. Here is why:

I shipped 3 packages yesterday. I drove to the Fedex airport location, where the people are actual employees of Fedex. Here is the quote I received online:

From: Savannah, 31404, United States | To: New lenox, 60451, United States on December 18, 2013.
Package Details: 1 package, 16.0 lbs, Your Packaging, 19 in x 22 in x 12 in, 100.00 USD.
Package Details: 1 package, 17.3 lbs, Your Packaging, 22 in x 15 in x 10 in, 100.00 USD.
Package Details: 1 package, 14.1 lbs, Your Packaging, 18 in x 13 in x 13 in, 100.00 USD.
End of day(3 Business Days) FedEx Home Delivery ® 54.68

$54.68.

I went to Fedex. I asked the guy, “If I am shipping 3 packages to the same destination, do I need to fill out three forms?” “No,” was the answer. I filled out the form with my service level– FedEx Ground– and checked “No Signature Required.” I handed him the form, and placed the packages on the scale one at a time for weighing and measuring.

He asks if I want insurance. I ask how much. He stated, “85 cents per hundred dollars over the first hundred.” I said fine, let’s do $200 per box, since these are Christmas gifts. Some of them are my sister’s-in-law, and I don’t really know their value.

He gives me the price, and it is considerably higher than the $54.68. The price was $72.83– $18.15 for insurance! Whoa. I ask why, and he says, “It’s because it is Home Delivery.” I ask to look for cheaper rates, since it was significantly higher than the online quote. He said Ground was more expensive, and that this was my cheapest option. I agreed because I had little choice– these gifts need to arrive.

I get home and look up my tracking numbers online. This is what it read: DIRECT SIGNATURE REQUIRED. I look at my receipt: Direct Signature. I look at my form: No Signature Required.

WHAT? I specifically checked “No Signature Required” because this is a gift, going to a busy mom who, in all likelihood, is not going to be home when Fedex arrives. I know for a fact that it is a safe neighborhood– safe enough to leave the packages– and therefore I chose No Signature Required.

I did another quote with Fedex online, this time with the insurance:

From: Savannah, 31404, United States | To: New lenox, 60451, United States on December 18, 2013.
Package Details: 1 package, 15.6 lbs, Your Packaging, 19 in x 22 in x 12 in, 200.00 USD.
Package Details: 1 package, 16.8 lbs, Your Packaging, 22 in x 15 in x 10 in, 200.00 USD.
Package Details: 1 package, 13.6 lbs, Your Packaging, 18 in x 13 in x 13 in, 200.00 USD.
End of day(3 Business Days) FedEx Home Delivery ® 62.33

Ok, $62.33 is not what I was charged. I was charged $72.83– $10.50 more. I start digging.

Here is what I have learned.

1. The first quote is accurate. The second quote is not, because…

2. By shipping the three packages using one form, Fedex considered them one shipment, because…

3. When you insure multiple packages with Fedex under one shipment, the insurance is looked at in two ways…

4. When you insure a package, the $0.85 per $100 over $100 carries a minimum $2.55 fee– PER PACKAGE, not per shipment. So…

5. I was charged $2.55 times 3 for my insurance– $7.15, even though I was told it would be $2.55 total, or $4.25 (depending on if you consider it 3 packages with $100 extra insurance on each, or 1 package with $500 extra insurance on the group).

6. Because I was mislead into choosing insurance over $500, Fedex REQUIRES a signature, even though my contract with them says No Signature Required.

7. Fedex charged me $10.50 for Signature Service and failed to inform me of the charges. In fact, they didn’t even list the $10.50 charge as a separate line item on my receipt– they hid the cost and applied ONE THIRD of $10.50 to each package’s individual cost.

8. The employee represented the $10.50 Signature fee and the excessive insurance costs as the price difference between Ground and Home Delivery, even though my quote was for Home Delivery.

9. I was not made aware that Fedex intended to alter their contractual obligation until after the transaction was complete. It was first noted on my receipt, after our transaction was completed, and after I have a right to regain possession of the package.

Clearly, as you can see, Fedex screwed up on this. They failed to inform me of fees beyond what was specifically listed on the contract. They failed to allow an opportunity for me to decline those fees. They failed to inform me that a minimum insurance fee applied. They failed to inform me that they intended to alter the contract that I submitted to initiate the transaction until after the transaction was complete.

This is just unbelievable.

I immediately contacted Fedex after I realized they overcharged me and altered our contract. The person at corporate told me that they would contact the local Fedex location, and have the service level corrected. I was instructed to take more of my time for a refund on the services I did not request, or were purchased due to misinformation from Fedex. I was given a case number, and have to call back in 7-10 days. Lucky me!

Today, I received a call from the Illinois Fedex location. They told me that I didn’t have to worry about the signature requirement because “the shipper takes care of that.” Well, I am the shipper. The Illinois Fedex person told me that they can only alter the package at the direction of the origination Fedex location, and to call corporate to see if I could get anything done.

I called corporate. High call volume. Disconnected. I call back, and get someone. I explain the whole situation, and this person transfers me to another department. I again explain the whole situation, and am told that there is nothing that can be done. In fact, the Fedex operator told me that he needed to transfer me to someone who could spend more time on the issue. I am transferred, apparently, to their highest level of customer support.

I explain the whole situation again, for the 5th time. She puts me on hold and calls the local Fedex location. I am put in contact with a man over there who basically explains that if I checked the box that says Signature Required, I can’t change it. I explain that my contract specifically has the No Signature Required box checked off, and that there are no initials indicating any approved changes. He must have looked at the paperwork, for after he denied it was even a contract, he started being more helpful. He said he would look into it, and call me back.

He did call me back promptly. He is apparently escalating the issue to his regional manager, to Fedex corporate, and to the manager of the Illinois location where the packages will arrive. He has stated he will call me back.

Fedex has a problem here. They alter service level, charge more for it, and don’t provide an explanation of the extra charges until after the transaction is complete. They roll those extra charges into a generic line item, further failing to disclose the actual fees. The amount of money is insignificant if you look at it on an individual basis. However, if you consider that this fee has likely been applied to millions of people over the years, it appears as though Fedex has been the recipient of a significant amount of revenue from customers who were either mislead or not informed of contractual alterations until after the transaction has been completed and the contract is in effect.

This is the exact situation for which the class action lawsuit concept was created– when individuals have been harmed in a rather benign way, but those individuals as a group have been harmed in a great way.

Fedex, you need to fix this, and fast. Very fast.

And I am due a refund of $18.15– PLUS whatever you think my time and aggravation are worth. I’m thinking a full refund of $72.83 is in order, along with a genuine apology.