StubHub, which is the place most sports and concert-lovers go to to buy tickets for live events, is being accused of “intentionally” deceiving its customers to boost profits.
District of Columbia Attorney General Brian Schwalb has filed a lawsuit against the company for allegedly using a bait-and-switch tactic on customers who purchase tickets on its platform.
Related: Temu lawsuit says low prices on app covers its harmful intentions
In the lawsuit, which was filed on July 29, StubHub is accused of practicing a scheme called “drip pricing,” which involves advertising only a fraction of the price of a product and later revealing charges to the customer as they go through the purchasing process.
“StubHub entices consumers to shop for tickets by displaying deceptively low prices that do not include StubHub’s mandatory fees – the bait,” states the lawsuit. “Only after a consumer has chosen tickets and invested time and effort clicking through an intentionally long, multi-page purchase process (in which customers are confronted with a countdown clock to create a false sense of urgency) does StubHub reveal the mandatory fees added to the ticket price – the switch.”
StubHub allegedly “fails to explain” hidden fees
Schwalb claims in the lawsuit that these hidden fees for tickets “can vary wildly,” hiking the advertised ticket price by up to 40%. The company allegedly made $118 million in hidden fees from District customers alone since late 2015. He states that StubHub “fails to explain” to customers how these fees are calculated and what they are used for.
StubHub does have an “Estimated Fees Filter,” which claims to display the price of each ticket with all of the fees included. However, customers have to enable the filter manually, and it is allegedly hard to find as it’s “hidden under multiple drop-down menus.”
The filter also allegedly didn’t reveal all of the mandatory fees for tickets until March this year after Schwalb’s office contacted the company about its practices.
Related: US sues top car insurance company for forcing unnecessary policies
The lawsuit also claims that StubHub creates a “false sense of high demand” to pressure customers to buy tickets and discourage them from making “informed decisions.”
“StubHub creates pressure to purchase by creating a false sense of high demand when it repeatedly states the event is selling fast and is likely to sell out, the chosen ticket is the last ticket remaining in a particular section, and/or the number of users who purportedly viewed the ticket in the last hour,” states the lawsuit. “StubHub uses a countdown clock, which pops up if users pause on a page in the transaction for 30 seconds, creating a false sense of urgency to purchase.”
More Retail:
- Sam’s Club customers threaten to end membership over new policy
- Tractor Supply has another boycott on its hands after radical change
- Dior pays a startling low price to produce a $2,780 handbag
Overall, the lawsuit aims to “permanently enjoin StubHub from utilizing these unlawful practices and to secure restitution, civil penalties, and other relief.”
StubHub did not immediately respond to TheStreet's request for comment.
The case comes at a time when the Biden administration is cracking down on “junk fees,” which is an initiative the president announced in October 2023. The goal is to tackle “hidden” and “surprise” fees that companies “sneak onto customer bills,” which increases costs and hurts competition. These fees are often seen in concert and airline ticket purchases, banks, restaurant orders, etc., and it costs consumers tens of billions of dollars annually.
"Folks are tired of being taken advantage of and being played for suckers," said President Joe Biden in remarks at the White House on Oct. 11.
Related: Veteran fund manager picks favorite stocks for 2024
