Millions of sports fans and concertgoers could have fallen victim to a deceptive pricing scheme at the online events platform StubHub that leads them to overpay for tickets, according to a lawsuit.
In a suit filed Wednesday by Washington, DC Atty. Gen. Brian Schwalb, StubHub was accused of using a "classic bait-and-switch scheme," specifically "drip pricing" where only part of the product's price is shown initially. The company will later reveal hidden fees just before shoppers make a purchase. These fees can allegedly boost the total cost of a ticket by 40%.
Furthermore, the lawsuit accused StubHub of using a countdown clock to pressure consumers into purchasing "out of fear that they risk losing the tickets." The countdown timer would make it so that customers may not have enough time to consider the hidden fees or compare prices on other platforms.
StubHub adopted its "drip pricing" model in 2015. Since then, the company has sold nearly 5 million tickets to consumers in Washington, DC, alone, earning the company $118 million in "hidden" fee revenue, the attorney general's office said.
"StubHub lures consumers in by advertising a deceptively low price, forces them through a burdensome purchase process, and then finally reveals a total on the checkout page that is vastly higher than the original advertised ticket price," Schwalb said in a statement on Wednesday, as quoted by CNN. "This is no accident-StubHub intentionally hides the true price to boost profits at its customers' expense."
StubHub's Response
In response to the lawsuit, StubHub said it strongly supports federal and state proposals to empower consumers and noted that it is "committed to creating a transparent, secure, and competitive marketplace to benefit consumers."
"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 in a statement.
Washington's lawsuit is not the first to accuse StubHub of leading consumers to overpay for tickets. A federal class action lawsuit filed in January in California also accused the company of deliberately misleading customers on ticket prices.
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