• Report: #720548

Complaint Review: United States Postal Service

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  • Submitted: Thu, April 21, 2011
  • Updated: Thu, June 16, 2011

  • Reported By: Michael — San Clemente California United States of America
United States Postal Service
475 L Nationwide United States of America

United States Postal Service Fraudulently sells insurance, the claims against which they have absolutely no intent of ever paying Washington DC, Nationwide

*Author of original report: Insurance is a product

*Consumer Comment: ALL shipping/package insurance is a rip off.

*Consumer Suggestion: Seriously?

*Consumer Comment: I Was Also Ripped Off by the USPS

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We recently expanded the shipping options for our online business to include shipping to Russia via the US Postal Service. Like most people who run a business, we chose to mitigate risk of damage or theft of our products during transport by purchasing insurance from our logistics provider(the USPS). Having experience dealing with private logistics companies such as Federal Express and DHL, we were under the impression that, in the event of a loss, our insurance claims would be paid. With USPS, nothing could be farther from the truth.

All the shipping and customs paperwork was filled out properly with a representative of the US Postal Service providing guidance every step of the way. Several packages arrived without issue, but when the first package went missing, we started the claims procedure. 

Mind you, the claims procedure cannot even be initiated until 5 business days after the date of mailing, 2 business days to arrive at the international dispatch, and three business days to be "inflight" to the package destination. At this point the USPS has, and takes all of, 30 days to do an initial investigation as to the status of the lost package, at which point, determining the package is lost, they send out printed claim forms. The printed forms always take 5 days to arrive, despite the fact any other piece of mail arriving from Washington DC arrives overnight. After filling out the claim forms and mailing them back, the USPS acknowledges posession of the claim 5 business days later, despite the fact they receive them next day.

At this point, no less than 45 business days, or two months after your package has been lost, the USPS considers your claim official. For international shipments, they commit to render a decision as to whether or not they will pay your claim within 60 days of this point. Based on personal experience, and everything that I have read on the internet, 9 times out of 10 they do not pay the claim.

Sadly, if you oppened up a new international destination for your online business, it will take three and a half months for you to discover that the insurance you are paying USPS for is completely worthless. The lost packages are still coming in, but I expect our losses will exceed USD$8,500 by the time we are done.

The excuse they handed us was that our packages contaibed cell phones, a product supposedly on Russia's prohibited item list, rendering our insurance null and void. Amazing that the claims adjuster was able to render a decision within 24 hours of having the claim escalated on day 95 of the claims process, while the USPS representative who aided in filling out the customs forms decided to withhold that information. Even more curious is the fact that 66% of the packages we sent arrived at their destination, and cleared Russian Federation customs without any issue whatsoever. More curious still is the fact that any of our packages that disappeared on the Russian side of the logistics process simply disappeared without any statement of govt seizure or rejection. The icing on the cake is the fact that several of the "lost" packages, never even made it onto the plane to Russia. 

I put myself in the shoes of a US postal worker, looking at a package with a $400 street value, knowing that the agency they work for will take no action to investigate it's loss, and I wonder every participant to the process would not steal every package they can get their hands on.

Considering that 66% of our packages arrived at their destination without issue, I also think about the money we paid for the insurance on those packages that the US Postal service quietly told us is worthless. If it is worthless, why have they not refunded, or even offered to refund, the amount we paid for insurance? Answer: Fraud.

The US postal service knowingly charging its customers for a product that they know is worthless. Even after they are forced into telling you the product they sold you is worthless, they will not issue you a refund for the product. This is the very definition of fraud.

Sadly, the US Postal service cannot be sued in small claims like any other legitimate busines. One has to file their claim in Federal court and pay for legal representation. The process can take up to two years, and often ends in failure, as it seems the federal government is not real big on cracking down on itself. I put in a call to the FBI this morning to determine if they would be willing to pursue an investigation into criminal charges. They flatly rejected the idea and referred me to the civil courts.

Where does this leave us? It leaves me eight and a half thousand dollars poorer after being ripped off by the US Postal service with quite literally no recourse whatsoever. It leaves the US postal service selling a product they know is worthless to millions of people every year in order to prop up their failing organization. It leaves the employees of the US postal service, and all parties to that supply chain, a license to steal without consequences. 

As it sits now, I've filed a freedom of information act to get at actual statistics indicating how many claims are filed and how many claims are actually paid out of the US Postal service. I also plan to write my Senators, my Congressmen, my postal service representatives, and whoever else will listen, to put an end to this criminal activity. 

This report was posted on Ripoff Report on 04/21/2011 05:21 PM and is a permanent record located here: http://www.ripoffreport.com/r/United-States-Postal-Service/nationwide/United-States-Postal-Service-Fraudulently-sells-insurance-the-claims-against-which-they-720548. The posting time indicated is Arizona local time. Arizona does not observe daylight savings so the post time may be Mountain or Pacific depending on the time of year.

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REBUTTALS & REPLIES:
1Author 3Consumer 0Employee/Owner
Updates & Rebuttals

#1 Author of original report

Insurance is a product

AUTHOR: Michael - (United States of America)

Josh, while I appreciate your sympathy, you need to remember that insurance is a product like any other. If a company knowingly provides  a bomb technician/skydiver/lion tamer life insurance, expecting the company to pay when the person dies from his declared profession is not only reasonable, it is expected. Failure to pay is considered fraud.

Shipping valuable to goods to Russia is no different. The value is declared on the package, along with the destination. You should also understand that we did not lose $8500 in a single lost shipment, but over more than ~20 lost shipments out of ~60 that were sent. While those numbers don't speak well of the Russian postal service, had the US Postal service responded to our insurance claims in under two and a half months, we would have discontinued sending to Russia much sooner and mitigated our losses. Unfortunately, we went forward with full faith that the insurance product we were buying from USPS actually had the value it's contract said it did. 
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#2 Consumer Comment

ALL shipping/package insurance is a rip off.

AUTHOR: Steve - (USA)

All carriers, USPS - UPS - FedEx, etc use third party insurance carriers and third party adjusters. It is standard operating procedure to deny every claim the first time.

They try to wear you down in hopes that you will just give up and go away.
And, putting insurance on something tells everyone who handles the package that there is something of value in the package. They know they can steal without any consequence.

Here's what you do. Ship only with delivery confirmation, which is free with USPS and trackable online.

Another way to beat them. Ship everything you can by media mail, as it is the cheapest way to go, and nobody steals a book!

Nobody checks the contents, so it is the honor system.

Beat them at their own game.

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#3 Consumer Suggestion

Seriously?

AUTHOR: Josh - (U.S.A.)

Seriously?  You expected packages sent by regular mail to RUSSIA, of all places, to arrive?  Packages worth $8500?  Obviously, you've never been to Russia.  The Russian mail service is so bad that even postcards get lost about 50% of the time.  A package containing anything valuable has about a 95% chance of getting stolen.  Customs officials are so corrupt that anything even remotely valuable-looking will be held up (and eventually stolen).  Since they are interested mostly in stealing the package, they will obviously not try to notify the shipper -- they'll just take it.  Also, the Russian postal service provides no tracking information, so the USPS will not provide any information after it leaves the US.  I wouldn't even trust Fedex to get it there, and that costs about 30x what the USPS charges (and you can't even BUY insurance, as far as I know).
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#4 Consumer Comment

I Was Also Ripped Off by the USPS

AUTHOR: Kay - (U.S.A.)

I totally understand what you are going through.  The USPS should be prohibited from selling insurance on a shipped item if they do not adhere to paying on legitimate claims.  I have also gone through the claims and appeals process and have received letters indicating that my claim is denied based on their guidelines, however, they do not provide any documentation/information on what exact guidelines they are referring too even after I have requested this information on numerous occasions.  They basically are taking the "sue me" attitude because they know that the general population does not have the resources to file suit and fight them in federal court and just give up.   I will continue to fight them on this in that they have provided me with no proof of their denial at this time.    This should totally be against the law! 

Kay
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