Last year, an Ontario Judge, Madame Justice Carolyn Horkins found that UPS Canada had violated the Ontario Consumer Protection Act and customers were required to pay brokerage fees that were not properly disclosed
The Supreme Court of Canada dismissed an appeal in the UPS class action suit. The appeal filed by United Parcel Service Canada Ltd wanted a review of the verdict which favoured customers in a suit which challenged the company’s unfair brokerage fees.
Last year, an Ontario Judge, Madame Justice Carolyn Horkins found that UPS Canada had violated the Ontario Consumer Protection Act and customers were required to pay brokerage fees that were not properly disclosed.
Using guidance from previous verdicts of the SCC regarding consumer protection statutes, Justice Horkins interpreted the legislation generously in favour of consumers and certified the case as a class action. UPS had argued the case was inappropriate for the class-action procedure but the case was further upheld as a class-action suit by the divisional court.
This verdict could affect the entire shipping industry; the case was first filed when the plaintiffs shipped a pair of shoes and ski boots from the U.S. to Canada. They were shocked to see extra charges being levied to cover supposed brokerage fees. The extra charges were almost double the initial fees charged by the shipping company. These brokerage fees, which were a big concern for many consumers, were levied without proper disclosure.
Through the course of the hearing, evidence was presented in court that UPS customer service receives at least 300 calls a day from customers who have concerns over these extra brokerage or other charges.
The lead plaintiff on the suit, Ryan Wright, was charged $40.29 extra brokerage fees on a pair of shoes he bought from an eBay vendor in Oregon. He initially paid US$22 for UPS to ship the package but later had to additionally pay the extra “brokerage” charges. The second lead plaintiff, Julia Zislin, was charged extra fees of $49.10 on a pair of ski boots valued at $100, she had initially agreed to only pay $19.23 total shipping fees.
By not properly informing customers about the brokerage fees that they could incur and insisting on payment of the said fees prior to delivery, UPS violated the Consumer Protection Act, the judge ruled.
The verdict in this case could set a benchmark in all businesses, shippers in particular could be dealt a big blow as their contracts and rules would now have to reflect the new interpretation of the consumer protection statute.