Ticket Brokers Agree to Pay Millions in Scalping Settlements
Federal officials announced Friday that three New York ticket brokers agreed to pay $ 3.7 million civil fines to clarify allegations of buying tens of thousands of event tickets and selling them on to customers at inflated prices .
The companies – Just in Time Tickets, Concert Specials and Cartisim Corp., all from Long Island – have been accused of violating the Better Online Ticket Sales Act, which is designed to prevent brokers from selling online ticket sellers like Ticketmaster. It also prevents the resale of tickets obtained through knowingly engaging in such practices.
The settlements are the first enforcement action taken by the Department of Justice and the Federal Trade Commission under the 2016 law.
“Those who break the BOTS Act are defrauding fans by forcing them to pay excessive prices for concerts, theater performances, and sporting events,” said Seth D. DuCharme, acting US attorney for the Eastern District of New York. in a statement. “This office will go out of its way to ban fraudulent practices that harm consumers.”
The lawsuits filed by federal prosecutors in Long Island against the three companies had accused the brokers of reselling thousands of illegally purchased tickets for millions of dollars in revenue between January 1, 2017 and today, often at substantial mark-ups.
Companies are accused of creating accounts on behalf of family members, friends and fictional people and using hundreds of credit cards to get the best seats at sporting events and concerts.
They are also accused of using ticket bots or automated software to circumvent protections designed to prevent non-human ticket purchases and to hide the IP addresses of the computers they use.
The three companies received higher civil penalties as part of the settlement, with Concert Specials agreeing to pay the largest settlement of $ 16 million. However, each of them was exempted from paying full fines if they agreed to pay amounts between $ 1.64 and $ 499,000 and meet certain additional conditions, including submitting compliance reports to the government.
The New York attorney general’s office had already reached settlements worth $ 2.76 million with six ticket brokers in 2016 after a report uncovered widespread abuse in the New York ticket industry. The report found that bots were rampant, with a high-tech scalper buying more than 1,000 tickets to a U2 show at Madison Square Garden in less than a minute.
Resale brokers must be licensed by the state, but the report found that many don’t.
A lawyer representing the three companies declined a request for comment.