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FTC orders refunds to Springsteen ticket buyers, sweeping changes in ticket resale market

February 18, 2010 |  9:59 am

Calling for an end to deceptive "bait and switch" tactics, the Federal Trade Commission Thursday announced a settlement with Live Nation Entertainment Inc.'s Ticketmaster unit that requires the company to provide full refunds to consumers who bought tickets to 14 Bruce Springsteen concerts at dramatically inflated prices.

FTC Chairman Jon Leibowitz said thousands of fans were steered to TicketsNow, a resale site owned by Ticketmaster, where they were charged premiums of double, triple or quadruple the $90 face value.

Other Springsteen fans were sold phantom tickets that never materialized, Leibowitz said. Ticketmaster failed to tell buyers that many of the resale tickets advertised on TicketsNow.com were not “in hand," but being sold speculatively. TicketsNow was only offering to find tickets to the Springsteen concert at the Verizon Center in Washington.

"Who in their right mind would spend $1,600 on tickets that they may or may not get?" Leibowitz said. "Any fan who didn't get a refund -- they will get them from this settlement."

Leibowitz estimated the settlement could refund as much as $1 million to thousands of consumers who were duped.

The FTC also called for dramatic changes in disclosure to make clear to consumers whether tickets are actually "in hand" or if they're being sold speculatively. Leibowitz said his agency is sending out warning letters to 10 other major ticket resellers, recommending that they review their websites "to ensure that you are not making any misleading statements or failing to provide material information to prospective purchasers of tickets listed on your site.”

Leibowitz declined to identify which sites would receive the letter.

"It seems to me [that] by far the worst part of what we found, investigating this industry in the context of our investigation of Ticketmaster, is that they were selling these tickets they didn't have," Leibowitz said.

The issue came to the attention of the FTC when Springsteen publicly criticized Ticketmaster about its handling of sales for concerts in May and June. Fans who went scouring for tickets on the website were met with the message "no tickets found." The FTC charged that Ticketmaster used its website to direct unwitting consumers to its TicketsNow site, where tickets were sold at prices of up to $400 a seat -- a dramatic premium on the $90 face value.

"Many consumers had no idea what was going on," Leibowitz said.

Ticketmaster also displayed the same misleading Web page to consumers looking to buy tickets for many other events between October 2008 and February 2009, the agency charged.

-- Dawn C. Chmielewski

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