According to the Lennon-McCartney song, “She's got a ticket to ride, but she don’t care.” According to a settlement announced by the FTC and Connecticut AG, consumers doing business with TicketNetwork through two of its top partners – Ryadd and SecureBoxOffice – were misled into thinking they were buying tickets at face value from the event venue. In fact, the companies were reselling tickets, often at above the original price. As a result, consumers got taken for a ride. And the FTC and Connecticut AG, well, they do care.
TicketNetwork, headquartered in South Windsor, Connecticut, is an online ticket resale exchange where brokers and others resell tickets to sporting events, concerts, etc. TicketNetwork promotes sales on its own sites and through the efforts of affiliates and partners like Austin-based Ryadd and San Diego-based SecureBoxOffice. According to the complaint, Ryadd and SecureBoxOffice mimicked the look of official sites in a way that led consumers to believe they were buying tickets from the authorized venue.
The complaint offers examples of how that worked. Say a consumer typed “radio city music hall” in a search engine. The first result at the very top of the page said “Radio City Music Hall,” described the site with the phrase “Official Ticket Source Online for Radio City Music Hall Tickets in NY,” and used the URL “radiocity.musichall-ny.com.”
Consumers who clicked that link were taken to a page with the prominent heading "Radio City Music Hall" and a picture of the storied venue. People could view a listing of upcoming performances, check dates and times, and even read a history of the building.
Prospective buyers who clicked the View Tickets button were taken to a page with a seat map and information about available tickets. Once they made their selection, they paid on a page headed “Official Online Tickets.”
What was really going on in this example? According to the FTC and AG, Ryadd bought the search engine link and created the initial “Radio City Music Hall” page. The page with the seat map belonged to TicketNetwork. What about the heading “Official Online Tickets”? As it happens, there was nothing “official” about it at all. It was just a business name used by Ryadd. Furthermore, consumers weren’t told that the price included the amount set by the actual reseller – plus a mark-up for Ryadd and an additional mark-up for TicketNetwork. That’s how many consumers ended up paying so much more.
Some of the pages included fine print statements like “No affiliation with Official Site,” and were later revised to say in even smaller print, “We are an independently owned and operated site specializing in sales in the secondary market. We are not affiliated with any primary website, venue, or box office.” But according to the FTC and CT AG, those statements were too little, too late – and insufficient to undo the deception.
What’s more, the lawsuit alleges that the defendants received numerous complaints about their practices from consumers, promoters, venues, groups like the BBB, and law enforcement agencies. Even so, TicketNetwork continued to offer financial incentives and technical assistance so Ryadd and SecureBoxOffice could draw in more consumers.
The proposed order in the case, filed in federal court in Connecticut, prohibits the defendants from misrepresenting that a resale ticket site is a venue site or is offering tickets at face value. Among other things, they’ll need to make clear and prominent disclosures that they’re resellers, that the price may be more than face value, and that they’re not owned by the venue, sports team, performer, or promoter. The order also spells out mandatory provisions for monitoring partners' activities. In addition, the settlement includes a $1.4 million financial remedy under Connecticut law.
Even if you don’t sell tickets to ride, dust off your Beatles LPs for other advice this case offers.
“Do You Want to Know a Secret?” Be upfront with consumers about who’s selling what. It’s unwise to use deceptive tactics to mislead people about the seller’s identity and the true nature of the transaction.
“I Should Have Known Better.” The complaint lists numerous instances where the defendants were warned about their conduct and yet didn’t change their tune. Savvy companies understand the importance of listening to complaints and re-evaluating their marketing strategies accordingly.
“With a Little Help from My Friends.” Under Section 5 and most state consumer protection statutes, it’s illegal to deceive consumers – and to work with others to that end. Given the breadth of liability under the law, it’s a mistake to assume compliance is someone else’s responsibility.