StubHub Sued Over Deceptive Pricing and Junk Fee Scheme

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StubHub Sued Over Deceptive Pricing and Junk Fee Scheme

As a seasoned gamer with years of experience navigating various online marketplaces, I can’t help but feel a sense of familiarity reading about this lawsuit against StubHub. The drip pricing strategy and hidden fees have been a constant source of frustration for consumers like myself, who often find ourselves in the midst of a seemingly endless checkout process, only to be hit with unexpected charges at the end.

As a gamer, I’ve found myself in a bind when trying to buy tickets for my favorite gaming event through StubHub. It seems the Attorney General of Washington, D.C. isn’t too happy with them either. They’ve filed a lawsuit against StubHub, claiming that they deceptively hide mandatory fees and don’t make it clear what these fees are for until deep into the checkout process, making it quite frustrating for users like me.

The legal claim, submitted to the Superior Court of the District of Columbia, outlines multiple instances where Stubhub is accused of misleading customers. This practice, often referred to as “drip pricing,” involves advertising a low initial price to attract ticket buyers, then leading them through unnecessary steps while using a timer to create a false sense of urgency. The final cost, when customers are asked to pay, is usually significantly higher than the original due to additional charges labeled as “fulfillment and service” fees that aren’t clearly explained, making it difficult for customers to compare costs with other platforms.

Washington, D.C.’s attorney general, Brian Schwalb, is attempting to obtain a court ruling that compels Stubhub to revise its checkout procedure and return over $100 million in ill-gotten gains from undisclosed fees, plus compensation for any losses suffered. He alleges breaches of District of Columbia’s consumer protection regulations.

The legal claim against StubHub claims they deliberately structured their “drip pricing” method to boost earnings. Instead, for a whole year in 2014, the business employed a clearer “all-in” pricing system that displayed total prices including mandatory fees upfront. A trial phase that randomly assigned customers between these two models found that people tend to buy tickets more frequently—and at higher costs—when fees are only revealed during the final stages of the checkout process.

In a case mentioned in the legal documents, StubHub promoted two tickets priced at $356 each, but additional costs brought the total up by almost 40%, resulting in a final cost of $497.

As a gamer, I’ve found myself in a situation where I believe StubHub has been less than transparent about their fees. They label them as “fulfillment and service” charges, but according to a complaint, these terms don’t truly reflect their purpose. Instead, these fees are allegedly determined by market forces like supply and demand, not the services they provide or the tickets fulfilled. This discrepancy is what the lawsuit is addressing.

The complaint points out that the fees charged by StubHub can be significantly different, and it fails to explain to customers how these fees are determined or what specific services they cover. Notably, these fees amount to approximately 40% of the listed ticket price, according to the complaint.

StubHub claims to show a clearer overall price for tickets, even including fees, but this feature is buried within several drop-down menus that most users won’t find, as alleged in the complaint. In fact, it wasn’t until March, when the D.C. Attorney General contacted the company about their pricing methods, that all necessary fees started to be included.

“For quite some time, StubHub has misled District customers through its complicated and deceptive fee system, according to Schwalb’s statement. He emphasized that residents of D.C. have been particularly affected by this alleged wrongdoing due to their higher-than-average spending on live entertainment compared to major U.S. cities like New York, Los Angeles, and Miami. Since 2015, when it started using the drip pricing model, StubHub is estimated to have sold around five million tickets in this region while hiding fees, generating approximately $118 million, he added.”

The legal action was initiated as online ticket marketplaces faced intensifying examination, with the Justice Department filing a lawsuit against Live Nation in May for alleged antitrust breaches regarding its influential position within the live events sector. The authorities aim to lessen ticket costs and charges by dismantling the company and Ticketmaster, as competition regulators declined to obstruct their 2010 merger. This move could significantly diminish the company’s widespread influence across various aspects of the industry.

In her statement, Sally Greenberg, CEO of National Consumers League, expressed concern that hidden charges in the ticketing sector have become excessively high.

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2024-07-31 12:25