OAN Staff Brooke Mallory
11:52 AM – Friday, August 2, 2024
Prosecutors claim that StubHub, an online ticket marketplace, is deceiving customers into paying more for tickets by employing predatory sales practices.
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Attorney General Brian L. Schwalb of Washington, D.C., asserted in a complaint that StubHub is deceiving customers by withholding mandatory fees until right before a transaction is completed. The lawsuit states that these surcharges could increase a ticket’s overall cost by 40%.
According to the lawsuit, StubHub often uses “drip pricing,” which is when a business offers a low price up front but then adds costs, misleading customers into paying more than they had anticipated. The lawsuit alleges that the approach is illegal under the District of Columbia’s Consumer Protection Procedures Act, which mandates that retailers give accurate information about the products they sell to customers in the jurisdiction.
The complaint, which was submitted on Tuesday, also alleges that StubHub is not giving customers accurate and lucid information regarding the rationale behind ticket costs or the methodology used by the business to determine them. Additionally, it claims that StubHub creates a false sense of urgency in order to compel customers to make a purchase by using a transaction countdown clock.
“We are disappointed that the DC Attorney General is targeting StubHub when our user experience is consistent with the law, our competitors’ practices, and the broader e-commerce sector,” the company said. “We strongly support federal and state solutions that enhance existing laws to empower consumers, such as requiring all-in pricing uniformly across platforms.”
The claims coincide with legislators’ and consumer advocates’ increasing examination of the detrimental effects of drip pricing, a retail strategy that generally adds fees to a purchase that aren’t made explicit, raising the cost of a good or service.
“Drip pricing is a phenomena where a company is trying to sell goods or services to consumers and slowly, over time, changing the terms of the transaction so that [by] the end of the transaction, it looks very different to the consumer,” Schwalb told CBS News.
“StubHub intentionally misleads consumers by deceptively offering a low price at the front end, luring them into a long, protracted buying process, oftentimes running consumers through multiple dozens of screens before they’re eventually given the final price,” he added.
According to Schwalb, these strategies are meant to discourage customers from backtracking on their purchase. For example, the lawsuit claims that StubHub’s website contains a countdown clock that gives customers the impression that the tickets they are purchasing could disappear and that users must click through several screens in order to reach the purchase page.
As a result, customers frequently purchase tickets that have fees attached that raise the whole cost by 40%. According to the attorney general’s office, StubHub has received $118 million in hidden fees from customers in Washington, D.C., the lawsuit continues.
In addition to trying to get StubHub to stop these misleading tactics, Schwalb’s office is now working to retrieve the $118 million in extra fees that customers have paid the corporation to purchase tickets.
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