Fedex overcharged for years, internal email says
FedEx Corp. has been “systematically overcharging” customers by billing businesses and government offices at higher residential rates, a company sales executive said in an internal email unsealed in a lawsuit.
“I have brought this to attention of many people over the past five or six years, including more than one managing director, and no action has been taken to address it,” Alan Elam wrote in an email on Aug. 2, 2011. “My belief is that we are choosing not to fix this issue because it is worth so much money to FedEx,” Elam said in a separate email that day.
The emails were unsealed Tuesday in a class-action, or group, lawsuit claiming FedEx Corp. and FedEx Corporate Services Inc. overcharged commercial and government customers as much as $3 each for millions of packages delivered.
The plaintiffs, who claim violations of federal civil racketeering laws, seek three times the amount of the alleged overcharges in their lawsuit.
“We allege that FedEx has and continues to engage in a pattern of intentionally charging its customers residential delivery fees for deliveries to obviously non-residential addresses such as courthouses, government offices and banks,” Steven J. Rosenwasser, a lawyer for the plaintiffs, said in an interview.
FedEx, based in Memphis, Tenn., has charged residential rates for deliveries to the U.S. Citizenship and Immigration Office, Bank of America Corp., Toyota Motor Credit Corp. and the National Passport Processing Center, according to the amended complaint filed in the lawsuit.
“Perhaps most telling, on at least 70 separate occasions, FedEx improperly charged a residential delivery surcharge to its customers for deliveries to FedEx’s own headquarters,” according to the complaint.
The lawsuit, filed in federal court in Memphis in 2011 seeking to represent a national class of consumers, also asks for an injunction barring FedEx from charging commercial customers at residential rates.
The Elam emails were among 11 documents unsealed and attached to the amended complaint Tuesday.
“These 11 documents do not tell the entire story of this case,” Sally Davenport, a FedEx spokeswoman, said in an email.
“We will continue to defend these allegations in a court of law and not the media.”
FedEx customers with billing concerns can seek refunds by going online at fedex.com or by calling 1-800-GoFedEx, Davenport said. “FedEx built its reputation on award-winning customer service,” she said.
The emails were initially classified by FedEx as confidential and unsealed by court order.
“Defendants’ own internal documents prove that defendants have known for years that they are unlawfully charging residential surcharges when they do not apply, but have permitted the unlawful surcharges to continue because they generate substantial illicit profits,” Rosenwasser and other plaintiffs’ attorneys said in an amended complaint filed after the order.