Predatory Sales Tactics by StubHub
Prosecutors in Washington, D.C. have filed a lawsuit against online event platform StubHub, alleging that the company is using predatory sales tactics to deceive consumers and make them pay more for tickets. The lawsuit claims that StubHub hides mandatory fees, which can increase the total cost of tickets by up to 40%, before consumers make a purchase. This practice, known as drip pricing, involves initially setting low prices and later increasing fees, leading consumers to pay more than they expected.
Deceptive Marketing Strategies
The lawsuit further alleges that StubHub fails to provide clear and accurate information about ticket fees to consumers, leading to confusion and frustration. Additionally, the use of deal countdowns on the website creates a false sense of urgency, pushing shoppers to make impulse purchases. These tactics violate consumer protection laws in the District of Columbia, which require merchants to provide truthful information about the products they sell.
Impact on Consumers
As a result of StubHub’s deceptive practices, consumers often end up paying hidden fees that significantly increase the final price of tickets. The Attorney General’s Office estimates that consumers in Washington, D.C. have paid a total of $118 million in hidden fees to StubHub. These practices not only harm consumers but also create unfair competition in the market, as honest businesses are at a disadvantage.
In a statement to CBS News, Attorney General Brian L. Schwalb emphasized the negative impact of drip pricing on consumers, highlighting the need for transparency and fair pricing in the retail industry. Schwalb’s office aims to stop StubHub from using these tactics and recover the $118 million in fees paid by consumers in Washington, D.C.
