The FedEx Fitbit saga . . . and why firm is not alone in levying fees
I.R. writes: We read with great interest your recent stories about FedEx and its charges. We were in the US in May and left behind a Fitbit activity wristband. The hotel offered to ship it to the UK if we supplied our card details, which we did. But my card bill was for £82 which seemed excessive. Shipping documents said the weight was 1.2kg yet the wristband weighs only 30g. Then a few days later we received a FedEx demand for a further £51 for duty and VAT. I eventually got the demand cancelled when I explained the item was lost property and not a purchase, but I feel frustrated by the reluctance of anyone from FedEx to justify the shipping charges. LOTS of readers have been in touch with similar complaints, particularly about vague fees slapped on top of duty or VAT charges that are not always correct. The problem seems to affect shipping companies across the board.
After an influx of letters and emails about FedEx in particular, I asked the company to comment on what you told me. It offered no comment on the shipping charges, except to say that anyone with questions should contact FedEx customer services, which you did without success.
But it did defend its right to charge you and other customers an extra fee for the work FedEx does in acting as a tax collector.
I realise that of course you were not the customer. FedEx was hired by the hotel in the US and not by you. FedEx admitted that when it brings goods into Britain from abroad, its agreement is with the shipper and not the recipient.
But it told me that it is up to the shipper of the goods to get the recipient’s agreement to pay any duty or taxes.
FedEx has no contract with the recipient and although it explained that it pays whatever is due to Revenue & Customs and then bills the recipient, it could not justify adding its own fees or explain what might give it the legal right to do this.
It is as if a company billed its employees for having to operate Pay As You Earn and deduct tax from their salary.
The system is far from foolproof. A reader – Roger – told me about an elderly relative who received goods worth about £20 from the Gulf. After receiving a strongly worded demand from FedEx, she felt forced to stump up £16, made up of £4 to the Revenue and £12 added by FedEx. She has now received a full refund after Roger intervened and FedEx admitted the £4 was not even due.
Another reader – Judith – says she has just received a similar demand for £4 plus FedEx’s £12 top-up. She has told FedEx: ‘I have no contract with you and consider this to be a total rip-off.’ If taxes are due, she will pay the Revenue directly.
But FedEx is not unique. Parcelforce also told me that it relies on overseas retailers to tell British customers that they are responsible for all charges. It added: ‘To help cover our costs when we present goods to customs authorities, we add an administration fee.’ The fee varies from £8 to £13.50. Parcelforce told me it makes no profit from this, but of course this does not stop the fee from being disproportionate to the amount of tax involved.
I asked TNT whether it levies an additional fee on top of whatever is due to the taxman and if so how much and on what legal basis. All I got as an answer was a link to its website and the vague statement: ‘TNT is a business operation and we offer a number of services to support our business customers’ shipments move through customs smoothly.’ So that is all right then.
Finally I went to courier company DHL. It referred me to the ‘standard conventions of international shipping’. Yet again, this relies on the overseas shipper of the goods explaining to the British buyer that not only will duty and taxes be due, but that DHL – chosen by the overseas shipper – will add £11 or 2.5 per cent of the duties and taxes, whichever is the greater.
Unsurprisingly, not all shippers explain this and not all British buyers are aware of it. One reader – Tony – ordered some eau de toilette from the US for £19. Even before it was delivered, he says, he was billed by DHL for a further £12, so he declined to accept delivery, got the purchase price back and let DHL have the eau de toilette.
There is no easy answer to all this. But the blunt fact is that people in Britain who receive goods from abroad do not choose the shipping company, so why should they pay the often disguised ‘advance disbursement fee’ slapped on top of the taxes?