Ticket Resale Companies to Pay $1.55 Million For Selling Tickets They Never Owned

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New York Attorney General Letitia James has announced a $1.55 million settlement resolving a lawsuit against TicketNetwork, Ticket Galaxy and their owner Donald Vaccaro for misleading tens of thousands of customers into purchasing speculative tickets for concerts and other live events.

"Because of their dishonest practices, these companies defrauded thousands of New Yorkers and duped customers into spending millions of dollars on speculative tickets," said NYAG James in a release. "We are holding these companies accountable for their deceptive practices that swindled New Yorkers out of their hard-earned money and are putting in place reforms to protect ticket buyers in the future."

The settlement, which was announced on July 10, was revealed on the final day of Ticket Summit, a ticketing conference organized by TicketNetwork and ticket reseller DTI Management.

The lawsuit focused on the brokers’ practice of selling speculative tickets, which refers to sellers offering tickets on the secondary market that they don’t actually own. Only after a consumer places an order for speculative tickets does the listing broker attempt to purchase real tickets, at a lower price, from a different source to provide to the buyer.

According to the NYAG’s office, Ticket Galaxy and other brokers listed tickets for popular events before tickets to those events had even been released for sale to the public. During this period — when few other tickets were available — the demand for tickets was so great that Ticket Galaxy and other brokers charged enormous premiums for tickets, at times hundreds or thousands of dollars above face value.

In addition, when Ticket Galaxy could not fulfill orders they misled consumers in effort to avoid admitting that they never owned the tickets. The NYAG explains that representatives from the company told complaining customers that they could not provide their tickets due to listing or technical errors or vague supplier issues, all of which were false claims.

Many consumers who purchased speculative tickets paid vastly inflated prices, received tickets that were different from what was advertised or didn’t receive tickets at all.

Under the terms of the settlement, the defendants will pay $1.55 million and adopt reforms designed to protect ticket purchasers in the future. Specifically, these ticket resale companies will need to enhance their disclosures to consumers -- clearly and conspicuously disclosing to consumers when they do not have possession of tickets and instead are offering to obtain them for consumers.

The companies are also prohibited from misrepresenting the reason why purchased tickets were never actually available in the first place -- because the ticket reseller never had them in their possession.

The settlement is subject to court approval.