The price of ripping off AU consumers: $7m

In Attractions, Customer Service, Government

ACCC has fined ticket reseller Viagogo $7m for ‘misleading Australian consumers’ by charging significantly more than its advertised price for popular events such as the Ashes and the musical, The Book of Mormon. Photograph: Jason O’Brien/PA

ACCC orders ticket reseller Viagogo to pay $7m fine for misleading consumers

From The Guardian, 2nd October 2020

Business practices were ‘unacceptable’ and penalty is warning to others that they are subject to Australian law, consumer watchdog says

Ticket reseller Viagogo has been ordered to pay a penalty of $7m for misleading consumers.

In proceedings brought by the Australian Competition and Consumer Commission (ACCC), the federal court found the Swiss-based company had made false and misleading representations when reselling tickets to live music and sports events.

It broke the law by claiming it was the “official” ticket seller to particular events and that certain tickets were about to sell out.

It would also add significant fees to the initial price, including a 27.6% booking fee, that were not disclosed until late in the booking process.

In a statement from the ACCC, several examples were listed where Viagogo would advertise a certain price, only for the final price to be significantly higher.

Tickets to the Book of Mormon musical were advertised at $135, but were actually sold for $177.45, including booking and handling fees. Tickets to the Ashes cricket series were also advertised at $330.15, but sold for $426.81 after fees were added.

In imposing the hefty penalty, justice Stephen Barley said the company’s conduct demonstrated a level of deliberateness, describing one category of representations as having been made on “an industrial scale”.

ACCC chair Rod Sims said: “Viagogo’s business practices were unacceptable. Viagogo misled thousands of consumers into buying tickets at inflated prices when they created a false sense of urgency by suggesting tickets were scarce and when they advertised tickets at a lower price by not including unavoidable fees.”

The court also outlined that it saw the penalty as a warning to other companies in the sector that they were subject to Australian Consumer Law.

“Today’s $7m penalty sends a strong signal to businesses like Viagogo conducting business in Australia that they cannot get away with profiting from misleading Australian consumers about the price of the tickets they are selling, or other misleading conduct.”

The federal court ordered an injunction against Viagogo, to reinforce the need for adherence to the consumer law. The court also ordered Viagogo to conduct a compliance program and pay the ACCC’s costs.

A Viagogo spokesperson said the penalty decision covered a period of less than eight weeks.

“Since that time, we have overhauled our platform – a process that included consultation with consumer protection regulators in a number of countries.”

“We are carefully considering today’s decision and for that reason we cannot provide further comment at this time.”

The ACCC took action against Viagogo in August 2017, and in April 2019 the court found Viagogo had misled consumers.

Viagogo to pay $7 million for misleading consumers

ACCC.gov.au – 2 October 2020

Ticket reseller Viagogo AG has been ordered by the Federal Court to pay a penalty of $7 million for breaching the Australian Consumer Law by making false or misleading representations when reselling tickets for live music and sports event, in proceedings brought by the ACCC.

The Court found in 2019 that Viagogo made false or misleading representations to consumers that it was the ‘official’ seller of tickets to particular events, that certain tickets were scarce, and that consumers could purchase tickets for a particular price when this was not the case because significant fees, such as a 27.6 per cent booking fee, were not disclosed until late in the booking process.

From 1 May 2017 to 26 June 2017, Viagogo’s website attracted consumers by advertising a headline price which did not specify a total price for tickets. It also failed to adequately disclose to consumers that it was not a primary ticket seller.

Examples included a ticket for the Book of Mormon advertised at $135 but which was sold for $177.45 including booking and handling fees, as well as Ashes cricket tickets advertised at $330.15, but sold for $426.81 after fees were added.

In imposing the penalty of $7 million, Justice Burley described the misrepresentations as serious or very serious, and considered the conduct demonstrated a level of deliberateness. He described one category of representations as having been made on “an industrial scale”.

Viagogo’s responses were described by the judge as giving it “the appearance of being a company that is indifferent to the interests of Australian consumers and which prefers to elevate its own profit motives above those interests, even when on notice of the potential for harm being done”.

ACCC Chair Rod Sims said: “Viagogo’s business practices were unacceptable. Viagogo misled thousands of consumers into buying tickets at inflated prices when they created a false sense of urgency by suggesting tickets were scarce and when they advertised tickets at a lower price by not including unavoidable fees.”

The Court also observed the need for general and specific deterrence in this matter, particularly to make it clear to corporations which conduct internet-based operations in Australia that they are subject to the Australian Consumer Law (ACL).

“Today’s $7m penalty sends a strong signal to businesses like Viagogo conducting business in Australia that they cannot get away with profiting from misleading Australian consumers about the price of the tickets they are selling, or other misleading conduct.”

The Federal Court ordered an injunction against Viagogo, to reinforce the need for adherence to the ACL. The Court also ordered Viagogo to conduct a compliance program and pay the ACCC’s costs.

Background

Viagogo AG is an online ticket resell platform with headquarters in Switzerland.

The ACCC took action against Viagogo in August 2017, and in April 2019 the court found Viagogo had misled consumers.

The ACCC enforces the Australian Consumer Law which applies to tickets as well as other consumer goods and services. In recent years various state and territory governments have also introduced specific legislation regulating the reselling of tickets, such as maximum price caps.

The ACCC published guides for consumers on how to purchase event tickets with confidence at Buying tickets online.

Consumers with queries about their state or territory’s ticket reselling laws should contact their state or territory’s fair trading or consumer affairs agency.

Release number:
208/20

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