Refunds will be issued by Ticketmaster to consumers who purchased tickets to 14 Bruce Springsteen concerts last year and were either overcharged or didn't receive any tickets at all, the Federal Trade Commission said Thursday.
Ticketmaster drove prospective purchasers from its main ticket-selling site to its reseller TicketsNow.com, charging a premium for its own tickets. And not every ticket sold even existed, FTC Chairman Jon Leibowitz said in a conference call with reporters. A settlement of the complaint lodged by the FTC was filed in U.S. District Court in Chicago.
The FTC said that from October 2008 to February 2009 Ticketmaster showed consumers a message -- for Springsteen concerts as well as other events -- that no tickets were available and then direct them to TicketsNow, where prices could be four times the face value.
In the case of Springsteen, Leibowitz said, the musician asked that ticket prices be capped at $95 while those trying to get them ended up spending much more with fees as high as the original ticket prices.
The Springsteen concerts were held last spring. New Jersey's attorney general already secured refunds for the two concerts held in that state.
Refunds will be issued in about six months after an administrator hired by the FTC goes through the TicketsNow database, the FTC said. The refunds would be the difference in the price between what was paid on TicketsNow compared to what would have been paid on Ticketmaster.
Springsteen himself said he was angry after learning of what had happened.
"We were informed that Ticketmaster was redirecting your log-in requests for tickets at face value, to their secondary site TicketsNow, which specializes in up-selling tickets at above face value," he said in a statement on his Web site at the time. "They did this even when other seats remained available at face value. We condemn this practice."
At first, Ticketmaster blamed a computer glitch. Then, the company issued an apology and largely committed to the changes being sought by the FTC. It was important, Leibowitz said, to get the commitment in writing in a legal document.
"Our goal it clean up the wild west of ticket reselling," Leibowitz said. "Buying tickets should not be a game of chance. That's not just fair to consumers."
LiveNation, which merged with Ticketmaster, issued a statement regarding the settlement.
"Live Nation is pleased with the terms of the Federal Trade Commission's announced settlement with Ticketmaster and TicketsNow. We are now ready to move forward and build a great company that serves consumers and artists with easy and transparent ticketing solutions," the company said. "We appreciate the FTC's diligence in closely investigating this matter and look forward to the Commission applying similar disclosure requirements to other leading players in the ticket resale sector."
Leibowitz said the practice of selling tickets without knowing if they will materialize makes the old-fashioned ticket scalper look good. "At least the scalper would have the ticket in hand."
Those paying for the "speculative" tickets did not know that when they made the purchase. In one instance, more than 1,000 tickets were sold that didn't exist. From now on, he said, ticket resellers will have to disclose whether they possess the tickets they are trying to sell.
Warning letters were sent to about 10 other companies that resell tickets, Leibowitz said, letting them know of the disclosures now expected of them.
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