Courier giant DHL padded own pockets with 'hidden fees,' class action alleges

A Vancouver law firm is going to court against DHL, alleging the courier giant profited by misrepresenting some of the fees it charges customers.

According to a proposed class action filed in B.C. Supreme Court last week, the North American operations for DHL's express courier delivery service have been requiring customers to pay extra fees to receive their parcels by making claims that are "false, misleading and deceptive."

Court documents claim that DHL leads customers to believe that fees they must pay once a parcel arrives from out of the country are government import and tax fees — when a large portion of them are actually going to DHL as a "processing fee."

"I don't think anybody has any difficulty paying for taxes and duty that's properly owing and payable," said the Vancouver lawyer behind the class action, Scott Stanley. 

"It's when there's additional fees that aren't clear where people get their backs up."

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The lead plaintiff in the case is Gayle Vallance — a retired school teacher from Fernie, B.C. Court documents say Vallance ordered two books on fabric weaving from the U.K. in February — paying DHL $98 for shipping.

Nine days later, she was advised by DHL that her shipment had arrived in Canada, but she had to pay $33.16 in "duties and taxes" before it would be delivered.

"At all material times prior to payment, DHL represented to the Plaintiff that the fee being charged on her shipment was for duties and taxes," say court documents. 

The claim says Vallance only learned "after numerous inquiries to DHL" that $17 of that fee went to the courier company as a processing fee.

Hidden fees?

At issue in the proposed class action is how transparent the company is about the fees it charges customers.

Court documents say that DHL usually sends an email to customers with the subject line "IMPORT DUTY/TAX PAYMENT," advising them to pay up or risk losing their parcel. 

The case says people paid the fees, believing them to be for duties and taxes. "In reality," says the claim, the fees charged "included a DHL processing or brokerage fee." 

"This was a hidden fee."

Stanley says customers are "already paying DHL to deliver these packages — they're not doing this for free. And this seems to be an extra charge that we say isn't clearly described for the consumer."

The proposed lawsuit says DHL conducted an "unlawful scheme" that breaches a section of the federal Competition Act and "constituted an unfair business practice contrary to consumer protection legislation" across Canada.

"DHL was unjustly enriched by its conduct," says the civil claim.

Go Public recently reported the story of a Calgary woman who — like Vallance — was surprised to learn that a chunk of the "duty and taxes" she believed she owed the government for importing a soccer jersey for her son was actually going to DHL as a processing fee.

After her story was published, Go Public heard from dozens of other customers who felt they, too, were misled by notifications from DHL that suggested all the additional fees — on top of the shipping already paid — were government charges.

According to the company's website, DHL is the biggest international courier company in the world, headquartered in Germany. With more than 380,000 employees, it serves more than 220 countries and territories and delivers almost 1.6 billion parcels a year.

DHL has yet to file a statement of defence, and the class action has not been certified — which determines whether it moves forward.

When contacted for a response, DHL spokesperson Daniel McGrath said the company does not comment "on active legal matters." When contacted about our previous Go Public story about alleged hidden fees, DHL spokesperson Hazel Valencia said information about the company's processing fee "is available on the DHL website."

Who is included in proposed class action?

Although filed in B.C., the proposed class action represents all residents of Canada who have paid DHL fees.

It seeks compensation for people who "sustained loss and damage" by paying DHL's processing or brokerage fees. 

It also seeks payment for the "stress and anxiety" caused by spending time investigating the fees charged by DHL, communicating with DHL and reporting the company's "unlawful conduct" to the Better Business Bureau and other consumer protection organizations.

The proposed class action is similar to one filed on behalf of Ontario residents against United Parcel Service in 2007. It, too, centred on brokerage fees that were charged to customers — allegedly without their knowledge. The case was settled in 2018.