DCMS Consultation
on Ticket Touting
Response by Scarlet Mist.
Scarlet Mist was established in 2003 and
provides a free face-value ticket exchange service. It is funded by commission
on the sale of new tickets.
1.
There is no agreement amongst
the various stakeholders as to whether a ticket is a commodity or a contract.
2.
There has been no agreed
definition of ticket touting. Even the House of Commons CMS Committee
[1]
failed to give a watertight definition, noting that ‘touting’ was a pejorative
term to describe the secondary ticket market, and concluding that the term has
very different meanings to different people.
3.
The difficulty in reaching a
definition encapsulates the problems in discussing the subject. Ticketing is an
opaque and complex business, where the consumer is often placed at a
disadvantage through lack of understanding, and there is considerable scope for
profiteering as a result.
4.
We believe that the industry
and the public have ambivalent and self-contradictory views on ticket touting.
5.
To the industry the touts offer
a ready market for tickets, are an easy solution to the problem of
refunds/exchanges and can act as a barometer of the popularity of events. They
have the overall effect of pushing up prices. Yet touts are a nuisance and
generate significant problems of their own.
6.
The public are openly critical
of touts, sometimes using emotive terms such as ‘scum’, yet they make use of
their services and buy tickets from them. Consumer studies have demonstrated
this ambivalent love-hate relationship between touts and their customers.
7.
Ticket touts and the ticket industry are a microcosm of the free
market economy. Attitudes vary towards this, based partly around the income and
political leanings of the commentator. The use of emotive language reflects
these underlying socio-political and commercial views.
8.
One often-used definition is
that of the ‘secondary’ market. However the distinction between the Primary and
Secondary Market is blurred, and events of the last few years have made it
harder for the consumer to determine the nature of the ticket seller. There are
now close links between promoters and the secondary markets. For example
Reading Festival now has an official relationship with Viagogo.
9.
The partnership between
Ticketmaster and GetMein further complicates an understanding of the market for
the consumer. In addition it complicates an understanding of the
commodity/service question, and the enforceability of the ‘non-transferability’
of tickets.
10.
The difference between the
Primary and Secondary markets is traditionally based on the pedigree and past
history of the ticket before it reaches the consumer. In practice the consumer
is often not aware of how the ticket has passed from promoter to seller, and
the distinction is of little benefit. Another difference is in the ticket
pricing, but secondary sellers may sell at below face value if they have
overstocked for an unpopular event, and different primary sellers may be
selling the same ticket at different prices.
11.
A more important distinction
for the consumer is a functional one. Specifically:-what are their rights to a
refund, what certainty do they have that the tickets are genuine, and what are
their rights if the events is cancelled or rescheduled? We believe that the
answers to these three questions are of paramount importance to the consumer,
and that this information must be available whenever tickets are sold.
12.
The secondary market ranges
from the casual seller through to some high earners making substantial sums.
These high earners pay no tax on their profits. We do not think this is fair.
13.
We have previously called
for this to be addressed. The increasing size of the secondary market makes
this more pressing. We urge the
government to investigate ways by which websites facilitating the secondary
market could be required to bring these untaxed earnings to the attention of
the taxation authorities.
14.
We are concerned that consumers
buying through the secondary market are at risk of fraud and they can lose
their money. We recognise and acknowledge that some secondary sellers take
steps to protect users, which we welcome.
15.
Escrow services are available
which offer some protection against fraud, but many customers are unwilling to
use them.
16.
There is limited scope for
victims to reclaim from fraudulent sellers, even when their identities are
known, and there are no significant disincentives for fraudulent sellers to
persist in their activities. The police find it difficult to secure convictions
even against repeated crimes, and Trading Standards agencies are weak.
17.
We would like to see a significant beefing-up of the legislation
around ticket fraud so that persistent offenders can be effectively punished.
18.
We agree that some principles
governing primary sales of tickets should be reviewed and tightened up.
19.
We use the term ‘non-interchangeable tickets’ to
encompass any scheme that prevents customer selling her ticket to someone else.
This includes named tickets, tickets requiring ID/credit cards and other
technological devices. The practicality, effectiveness and affordability of
such schemes varies depending on precisely how they are implemented.
20.
Such schemes can be against the
interests of the consumer, since they prevent her from reselling a ticket she
is unable to use. Such schemes would only be acceptable if they were combined
with a fair and appropriate refund policy. If refunds are not readily available
then we would be opposed to non-interchangeable tickets.
21.
Staggering the release of tickets and/or
preferential pricing of tickets would be practical, affordable and effective.
a. Selling a second tranche of tickets at either a lower or higher
price would each be appropriate under different circumstances, depending on the
demand for the particular event. It would be important to make clear at the
outset what the arrangements would be.
b. The final sale should not be on the actual day of the event if there
is a chance of a major sell-out, since it could attract large numbers of
disappointed fans.
c. A staggered release of tickets introduces an element of ‘gaming’
into the purchase of tickets. It may also raise hopes unduly for fans, who
might then be more tempted to buy from a tout. The psychology of their
behaviour may be irrational.
22.
Issuing tickets preferentially
to “fan club members” or at a higher price is a form of staggered release.
23.
We strongly support the idea of
easier ticket exchanges and/or refunds,
and would add the following comments:-
a. We would accept that refunds may not be in full, and that a modest
handling/transaction fee would be appropriate.
b. We would also accept that the considerations for refunds vary
depending on the timing:-
i.
Customers should expect full
refunds (minus handling charge) when the event is some time in the future.
ii.
As the date of the event
becomes closer then full refunds may be less appropriate, and a sliding scale
should operate to reflect the difficulties promoters will have in re-selling.
c. One objection to refunds is that they help touts by offering them an
easy way to recoup their money if they have bought more tickets than they can
sell. This objection can be addressed by imposing stringent conditions on
refunds, including demanding original invoices/documentation at the time of
refund, and limits on the number of refunds.
24.
Refunds should always be
available if the date of the event is changed.
25.
We believe that a code of
practice policed by STAR is ultimately more enforceable and more fair than one
organised by government or any other body. However we are concerned that STAR
does not reflect the interest of all stakeholders.
26.
We therefore suggest that STAR
should co-opt representatives of specific interests and representatives of
fans/consumers onto its policy-forming committee.
28.
The alternative would be for a
code of conduct to be formulated by the government, which we do not think would
work as well. However it would be appropriate for a DCMS and an OFT
representative to sit on the STAR policy-forming committee.
29.
The penalties for failing to
comply with the code of practice need to be determined in advance. We would be
concerned that large ticketing organisations who chose to flaunt the rules
could escape any penalties since their commercial clout would render them
‘above the law’. If this were to happen then it would undermine any voluntary
industry-led agreement.
30.
We do not believe that
legislation to restrict sale could work, because of the difficulties in defining
‘touting’. However we believe existing legislation could be tightened up or
enforced in the following areas.
a. The information given to the consumer (see below).
b. As stated above we believe that fraudulent sellers should be subject
to stiffer and more effective legislation.
31.
When refunds/exchanges are not
available then genuine sellers are forced to seek a buyer at the venue. They
can then be subject to the unwelcome attention of the police. We think that
this is unfair. We think that selling a small number of tickets outside a
venue, where the seller is not a habitual street-seller, should be exempt from
this attention.
32.
We do not believe that these
warrant special consideration. They form
a special class of highly popular and oversubscribed events.
33.
We have already alluded to this
above, and that consumers should be given the following information-
i.
The price of the ticket and the
breakdown of the price. This breakdown should include handling fees.
ii.
The type of ticket eg standing,
restricted view.
iii.
The nature of the sale:-
1. Refunds policy
2. Policy in the events of a cancellation
3. Pedigree of the ticket and an assurance of whether or not they are
bona fide.
34.
The pricing of tickets in the
Primary market is confusing to consumers. We think that basic ticketing costs
should be incorporated into the overall price of a ticket, and that
advertisements from promoters and bands should quote the ‘on-the-road’ price.
This price should be the basic price that the consumer should expect to pay
including the costs of ticketing. When multiple primary ticket agents are
selling tickets for the same event at different prices then the promoter should
quote one or other price in their promotions; the ticket agent selling at the
different price should then be able to justify this differential to his
customers.
35.
We have suggested in §27 above that the composition of STAR should be modified
to include secondary sellers and other bodies. If this suggestion is acted on
then members of the association should be able to advertise membership of the
organisation, and affirm that they comply with its code of conduct. It should
be made possible for consumers to confirm that a seller is a member of the
association by visiting the STAR website. Fraudulent use of the STAR logo
should be a criminal matter.
36.
If this suggestion is not
adopted then we see no easy way of indicating to the consumer that the agency
that they are buying from complies with the code of conduct.
37.
We would like to see ticket
return facilities established for football clubs. This should be organised on a
per-club basis, with buyers required to demonstrate that they comply with the
relevant anti-hooligan laws.