Government Sues Ticket Resale Websites That Allegedly Admitted To Using Fake Accounts To Buy Concert Tickets

Shut all these scumbags down.

I’m generally all for free markets and capitalism, but the whole point is to add value or provide something that consumers can’t get elsewhere.

These ticket resale sites are doing the exact opposite…allegedly.

We all know what a disaster it can be to try to buy tickets to a concert these days. You have to deal with presales, queues, “verified fan” requirements, hidden fees…and then as soon as tickets go on sale (or sometimes even before), they pop up on resale sites for massive markups.

It happened recently when Zach Bryan performed at Red Rocks in Colorado. In order to ensure that tickets went to actual fans and keep prices at just $50 per seat, tickets for the show didn’t even go on sale until the actual day of the event, and were only available to fans who had pre-registered and been selected to buy them.

But despite all of that, tickets were still popping up on resale sites for thousands of dollars in the days and weeks leading up to the one-night-only event, leading Zach to remind fans not to buy from these shady sites:

“Keep gettin’ stuff like this. The tickets are not for sale. They go on sale the day of the show. The people selected for the tickets will be able to purchase them -day of- to limit the pieces of s*** who resell them. God speed ‘n can’t wait to see everyone there. It’s gonna be awesome. Leave me outta this.”

In 2016, President Barack Obama signed the Better Online Ticket Sales Act, or BOTS Act, into law in an attempt to try to combat the resale problem. The legislation prohibited the resale of tickets purchased using automated bots, and imposed a fine of $16,000 per violation.

And yesterday, the Federal Trade Commission filed a lawsuit against several companies, including online ticket resellers, it accused of violating the BOTS Act.

The complaint, filed in the federal district court for the Northern District of Maryland, accuses Key Investment Group of owning several ticket resale websites which use fake accounts to buy concert tickets and then sell them on the secondary market for a massive profit.

The websites include Epic Seats, TotalTickets.com and Totally Tix. And according to the complaint, employees of Key Investment Group would use software disguised to hide their IP address in order to create thousands of fake Ticketmaster accounts in order to buy concert tickets, which they would then list on their sites for resale, circumventing Ticketmaster policies not only on ticket limits but also requiring that accounts be linked to a real person.

As a result, the company was allegedly able to purchase 321,000 tickets to over 3,200 live shows from June 2022 to December 2023, at a cost of nearly $47 million. These tickets were then resold for $52 million, resulting in revenue of over $5.5 million for these illegal purchases.

The purchases include tickets to 38 shows on Taylor Swift’s Eras Tour. Everybody knows that these tickets were nearly impossible to get on the primary market, but somehow the defendants were allegedly able to buy 2,280 tickets to the tour and sell them for a profit of over $1.2 million. For just one show at Allegiant Stadium, the government alleges that the company used 49 different accounts to buy 273 tickets, netting over $119,000 in profit.

And for a Bruce Springsteen show at MetLife Stadium in New Jersey, the companies allegedly used 277 accounts to buy 1,530 tickets (despite there being a limit of four tickets per person), which they then sold for $20,000 in profit.

But that’s not all: Aside from using fake Ticketmaster accounts, the company was also crowdsourcing people to sign up for “Verified Fan” codes, and paying them for every code they were able to get. A flyer in Baltimore reportedly advertised the opportunity for people to “make money doing verified fan sign ups,” with the company offering people $5 for creating an account and between $5 and $20 each time they were able to get a Verified Fan presale code.

At one point Ticketmaster determined that Key Investment Group controlled over 3,100 Ticketmaster accounts, which were generally not linked to a unique individual. And at one point, the government alleges that the defendants even ratted themselves out when they learned that the FTC was investigating their business practices.

According to an email attached as an exhibit, one of these fake email accounts contacted Ticketmaster to let them know that they had used 19 fake accounts to buy 61 tickets to a Bad Bunny concert. But instead of canceling the purchases, Ticketmaster told them that as long as the purchases were made using different accounts and credit cards, it was within the guidelines.

(Don’t be mistaken: Ticketmaster isn’t the victim or the good guy in all this. They knew what was going on and did nothing to stop it).

The FTC is alleging that the defendants made more than 107,000 purchases and obtained nearly 380,000 tickets, and the government is asking the court to issue an injunction against Key Investment Group, as well as the resellers named as defendants. They’re also asking the judge to order them to pay fines for each violation of the BOTS Act, which could amount to over a BILLION dollars.

Of course this is just one small step to addressing the problem with the ticket buying process, but it’s nice to see action finally being taken against these scumbags who are ripping off actual consumers.The post Government Sues Ticket Resale Websites That Allegedly Admitted To Using Fake Accounts To Buy Concert Tickets first appeared on Whiskey Riff.