StubHub is facing allegations of using predatory sales tactics to deceive consumers into paying more for tickets. The Washington, D.C., Attorney General filed a lawsuit claiming that StubHub hides mandatory fees until just before shoppers make a purchase, significantly increasing the total cost of tickets. This practice violates the District of Columbia’s Consumer Protection Procedures Act, which requires merchants to provide accurate information about consumer goods sold in the city.
The lawsuit also accuses StubHub of failing to provide clear information about ticket fees and using a transaction countdown clock to create a sense of urgency among consumers. The company’s use of drip pricing, where initial low prices are later increased with hidden fees, can mislead consumers and pressure them into making a purchase. These tactics are designed to prevent shoppers from abandoning their purchase, ultimately resulting in consumers paying up to 40% more for tickets than they initially expected.
Consumers in Washington, D.C., have reportedly paid around $118 million in hidden fees to StubHub. The attorney general’s office aims to stop the company from using these deceptive tactics and to recoup the fees paid by consumers. The Biden administration has also pledged to combat junk fees, which annually cost shoppers billions of dollars in excessive charges. Drip pricing can manipulate consumers into spending more money than they had planned, as shoppers tend to overestimate the time and effort needed to find a better deal.
StubHub adds fulfillment and service fees to ticket purchases right before checkout, which are alleged to be unrelated to actual fulfillment or service. The company does not disclose how these fees are calculated or what they cover, leading to a significant increase in the final ticket price. Previous lawsuits have been filed against StubHub regarding its pricing practices, including allegations of hiding the final cost of tickets from customers. The company’s actions are not unique, as other industries like hotel chains have also faced similar allegations of hidden fees and drip pricing.
Overall, the lawsuit against StubHub highlights the deceptive sales tactics employed by the company to mislead consumers and inflate ticket prices. These practices not only harm consumers by causing them to pay more than expected but also create an unfair advantage for businesses that engage in honest pricing practices. The outcome of this legal action could have significant implications for how companies disclose fees and pricing information to consumers in the future.
