Examples:

• • A consumer sees a $50 ticket on StubHub, but after clicking through many pages and entering their info, learns it’s actually $75 with hidden fees.
  • The 50% fee StubHub adds has nothing to do with their actual costs to service the order and deliver the ticket, despite what the fee name implies.
  • Most users never find the “Estimated Fees” filter that’s buried in the interface, and until recently it didn’t even include all fees when turned on.
  • Urgent “5 minutes left!” countdowns and “90 people viewing” messages pressure users to rush through checkout before researching competitor prices.
  • StubHub tested showing fees up front but it reduced sales, so they chose profits over transparency and hid the fees to drive more revenue.

How It Violates DC Consumer Law:

• • DC’s Consumer Protection Procedures Act (CPPA) prohibits deceptive and unfair trade practices related to consumer goods and services.
  • Advertising artificially low prices and hiding mandatory fees is illegal misrepresentation of the true price – classic false advertising.
  • Calling the fees “Service Fees” is deceptive since they’re not reflective of StubHub’s actual costs to service the transaction but based more on their profit goals.
  • Offering an “Estimated Fees” filter that’s hard to find and doesn’t include all fees as promised is unfair and misleading.
  • Using dark patterns like countdowns and scarcity warnings to rush and pressure consumers is an unfair high-pressure sales tactic.

FAQs:

• • Is it legal to charge fees on top of the listed price? Yes, as long as all mandatory fees are clearly disclosed up front as part of the advertised price, not hidden until later.
  • How did StubHub’s “Estimated Fees” option violate the law if it let users see full prices? Because it was hard to find and until recently, didn’t actually include all fees despite promising to – so it was still deceptive.
  • How much extra has StubHub collected from DC ticket buyers through these tactics? An estimated $118 million in hidden fees from DC buyers since 2015.
  • Why does it matter if StubHub’s research found hidden fees drove more sales? It shows they knew the tactic was misleading and chose profits over transparency.
  • Isn’t it the buyer’s responsibility to research fees before purchasing? Consumers have a right to transparent pricing and shouldn’t have to hunt for hidden fees.

Examples:

• • Jane sees a $200 ticket on StubHub and a $225 ticket on a competitor’s site, so chooses StubHub – not realizing there’s a $50 hidden fee.
  • John gets drawn in by a seemingly great price, then after entering info over many screens feels committed to completing the order despite last-minute fees.
  • An estimated 4.9 million tickets to DC events were sold with $118 million in hidden StubHub fees – significant extra costs for District consumers.
  • Transparent ticket sellers lose sales to StubHub because buyers think StubHub is cheaper, reducing options in the marketplace.
  • Consumers don’t know what to believe about prices and terms online after being misled, making them hesitant to participate in e-commerce.

How Consumers Can Protect Themselves:

• • Compare the final “out-the-door” price across ticket marketplaces, not just the initially advertised list price – factor in all taxes and fees.
  • Look for an “all-in pricing” filter on ticket sites and insist they honor that by including all fees in the first price you see, not adding more later.
  • Don’t let countdown clocks, scarcity warnings, or multi-step checkouts rush you into buying before thoroughly comparing prices and terms.
  • Read the fine print on fees to understand what you’re paying for – a true “service fee” should be reasonably related to actual costs to service the sale.
  • Report any false advertising, hidden fees or unfair practices to consumer protection authorities like the DC Attorney General’s office.

FAQs:

• • Isn’t it normal for marketplaces to charge service fees? Yes, but they should be clearly disclosed up front, not snuck in at the last minute, and reasonably tied to actual service costs.
  • What if a way to tell if fees are reasonable and not inflated? Look at competitor fees for similar services – if one site’s fees are much higher, that’s a red flag they may be inflated.
  • Why do consumers fall for tricks like scarcity warnings and countdown clocks? They create a false sense of urgency that rushes people into buying before thinking it through.
  • How did StubHub’s tactics give them an unfair competitive advantage? Consumers chose StubHub thinking they were cheaper, when the final price was often higher after hidden fees.
  • What if a site has hidden fees but their final price is still cheaper? It’s still deceptive – the advertised price should be the true price. Report it to authorities.

Examples:

• • If successful, StubHub would have to include all fees in the initial ticket price, not incrementally raise it throughout checkout.
  • StubHub’s service fees would have to reflect the actual cost to service the transaction and couldn’t secretly be boosted for pure profit.
  • Phony countdown clocks, low-inventory alerts and other dark patterns pressuring consumers to buy would be banned on StubHub.
  • As punishment and deterrence, StubHub would pay civil fines to the District for each violation of the consumer protection law.
  • StubHub would refund excess fees it collected from DC consumers who were misled by the deceptive pricing practices.

How It Could Impact the Ticket Industry:

• • If DC prevails, it could set a precedent that spurs action against drip pricing and hidden fees in other jurisdictions and industries.
  • Ticket marketplaces may proactively adopt all-in pricing and more transparent fee structures to avoid similar legal challenges.
  • Deceptive design tactics in e-commerce could come under closer scrutiny by regulators and consumer protection watchdogs.
  • Consumers could become savvier in spotting and avoiding hidden fees and high-pressure tactics when shopping online.
  • Competition based on transparent, truthful pricing rather than sneaky fees could increase in the ticket marketplace.

FAQs:

• • What happens if StubHub refuses to change its practices? The court could require them to comply and impose additional penalties for non-compliance.
  • How much could StubHub have to pay in restitution to DC consumers? Based on the $118 million estimate of hidden fees charged, refunds could be substantial.
  • Will StubHub have to change its pricing practices everywhere or just in DC? The court order would only directly apply to DC, but StubHub may change elsewhere to avoid other suits.
  • Could StubHub just eat the civil penalties as a cost of business? Possibly, but significant financial penalties still act as a deterrent and public relations hit.
  • What message would a DC victory send to other online sellers? That regulators are watching and will crack down on deceptive pricing and manipulative dark patterns.

Questions: Deceptive Pricing Allegations

• • 1. What is “drip pricing” that StubHub allegedly used?
    • A) Slowly leaking price info to competing sellers
    • B) Advertising a low price then adding more fees during checkout
    • C) Gradually increasing prices as the event date approaches
    • D) Offering small discounts to price-sensitive buyers
  • 2. How did StubHub allegedly misrepresent its fees?
    • A) Calling them “shipping fees” when tickets are digital
    • B) Labeling them “taxes” that go to the government
    • C) Calling them “service fees” unrelated to actual servicing costs
    • D) Not disclosing they have fees at all
  • 3. What was allegedly deceptive about StubHub’s “estimated fees” filter?
    • A) It didn’t exist at all
    • B) It was hard to find and until recently still hid some fees
    • C) It only worked on the mobile app, not the website
    • D) It disappeared if you refreshed the page
  • 4. What are examples of alleged “manipulative dark patterns”?
    • A) Countdown clocks and scarcity warnings
    • B) Forcing users to make an account to see prices
    • C) Multi-step checkouts with hidden fees
    • D) All of the above
  • 5. What did StubHub’s own research allegedly find about hiding fees?
    • A) It reduced customer satisfaction
    • B) It increased consumer trust in the brand
    • C) It made people more likely to buy higher-priced tickets
    • D) It had no impact on buying behavior

Answers: Deceptive Pricing Allegations

• • 1. B) Drip pricing is advertising a low base price then incrementally adding unavoidable fees during the checkout process.
  • 2. C) StubHub’s “service fees” were misleadingly named since they weren’t tied to actual costs of servicing the sale but based more on supply/demand.
  • 3. B) The “estimated fees” toggle meant to show the full price up front was hard to find and until recently still omitted some fees.
  • 4. D) Manipulative dark patterns included countdown clocks, scarcity alerts, forced account creation, and multi-step checkouts with hidden fees.
  • 5. C) StubHub’s internal research showed hiding fees until the end made people more likely to buy costlier tickets.

Questions: Lawsuit Demands & Impact

• • 1. What does DC’s lawsuit demand StubHub do about drip pricing?
    • A) Fee elimination
    • B) Inclusion of all mandatory fees in the initial advertised price
    • C) Offer an installment plan for fees
    • D) Give DC buyers a fee waiver
  • 2. How does DC want StubHub to change its “service fee” practices?
    • A) Clearly disclose fee calculations and not disguise profit as costs
    • B) Donate excess fees to charity
    • C) Let users haggle over the fee amount
    • D) Charge higher fees to out-of-state buyers
  • 3. What penalties does DC seek against StubHub?
    • A) Prison time for executives
    • B) Refunds for misled DC consumers
    • C) Civil fines for legal violations
    • D) Both B and C
  • 4. How might a DC victory impact the ticket industry?
    • A) Set a precedent that prompts action in other states
    • B) Inspire other ticket sites to adopt all-in pricing
    • C) Spur scrutiny of deceptive online sales tactics industry-wide
    • D) All of the above
  • 5. What’s the key takeaway for consumers from this lawsuit?
    • A) There’s no point comparison shopping for tickets
    • B)B) Be vigilant for hidden fees and deceptive tactics when buying online
    • C) Never buy event tickets from resale marketplaces
    • D) Always choose the lowest base price without checking fees

Answers: Lawsuit Demands & Impact

• • 1. B) DC wants StubHub to include all mandatory fees in the upfront advertised price, not add them incrementally during checkout.
  • 2. A) The lawsuit seeks clear disclosure of fee calculations and a stop to disguising extra profits as just covering costs.
  • 3. D) DC pursues both refunds for misled consumers and civil penalties against StubHub for violating consumer protection laws.
  • 4. D) A DC win could spur action against drip pricing in other states, push the industry toward all-in pricing, and increase scrutiny of online deception.
  • 5. B) This case reminds consumers to compare the real total price across sellers and watch for red flags like hidden fees and pressure tactics.

Disclaimer

This article is informational and is not formal legal advice.

Laws and interpretations can vary by jurisdiction and change over time, and application of legal principles to individual circumstances requires a fact-specific inquiry by qualified counsel.

Seek an experienced consumer protection lawyer licensed in your state for an assessment of your particular situation and legal needs.