Class Action Alleges Pitney Bowes “Rips Off” Customers

Posted April 29th, 2009.

Complaint Seeks $20 Million in Damages from Postage Meter Giant & Affiliates

For more information, call Jamie Moss, newsPRos, 201-493-1027

(April 29, 2009, White Plains, NY) – Kings Choice Neckware, Inc., a former Manhattan-based tie manufacturer, has filed a class action complaint in U.S. District Court for the Southern District of New York against Stamford, Connecticut-based Pitney Bowes and its financing and financial services affiliates, alleging that the three mail management corporate giants use their equipment return fee on terminated leases to rip off customers and former customers.

“Pitney uses its equipment return fee as a cash cow to unjustly fatten its corporate coffers,” said Steven Wittels, class counsel of Sanford Wittels & Heisler, LLP. “Under the law, Pitney is barred from imposing any fee or it may assess only the reasonable cost of returning its equipment. We believe it takes advantage of and penalizes many small companies by charging them excessive and unreasonable fees for returning equipment when their leases end.”

Pitney is a self-described “market leader in 130 countries” with more than two million customers worldwide and annual revenue of $6.3 billion. Kings Choice was recently forced to close its doors as a result of the economic downturn and the availability of cheaper foreign products in its market.

Steven Wittels and Jeremy Heisler partners at Sanford Wittels & Heisler, LLP’s New York office, represent Kings Choice and the class in this David v. Goliath dispute.

Pitney leases digital postage meters to customers in the U.S. and around the world, many of them small businesses like Kings Choice. According to complaint, when Pitney’s leases end and its customers mail their meters back, as required by their lease contracts, Pitney extracts its pound of flesh by charging a mailing fee that is many times more than the actual cost of postage – especially for customers that are not extending or upgrading their leases.

Kings Choice leased a postage meter from Pitney for 51-months on a lease agreement in 2002, and then from month-to-month. In December 2008, Kings Choice decided to return the equipment to Pitney, using a box and a pre-paid shipping label provided by Pitney to send the product via UPS from New York City to Springsboro, Ohio.

“According to UPS, the cost of shipping the meter in question between the two cities is $11.90,” said Mr. Heisler. “But in January, Pitney sent Kings Choice a return equipment invoice for $100, stating it was the cost incurred to recover the postage meter.”

The complaint alleges that Pitney’s actions violate the Connecticut Unfair Trade Practices Act, and constitute breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment of Pitney’s bottom line.

The suit asks for an award of at least $20 million in compensatory damages to Kings Court and the class, as well as attorney’s fees and court costs. A jury trial is demanded.

Sanford Wittels & Heisler LLP has offices in Washington, D.C., New York, and San Francisco. The firm specializes in employment discrimination, wage and hour, consumer and complex corporate class action litigation and has represented thousands of individuals in some of the major class action cases in the United States. The firm represents individual clients in employment, employment discrimination, sexual harassment, whistleblower, public accommodations, commercial, medical malpractice, and personal injury matters.

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