StubHub tricks people with ‘bait-and-switch’ pricing scheme, DC attorney general alleges

By CNN Newsource

Published July 31, 2024 10:16 AM

By Matt Egan, CNN

New York (CNN) — Millions of sports fans and concertgoers are being duped by a deceptive pricing scheme at StubHub that hides the true cost of tickets until the very last moment, according to a lawsuit filed Wednesday by Washington, DC Attorney General Brian Schwalb.

The lawsuit accuses StubHub of deploying pricing tactics that “trick” consumers into overpaying for tickets and are designed to boost profits.

“StubHub uses a classic bait-and-switch scheme,” the lawsuit said, describing what’s known as “drip pricing” where only part of the product’s price is advertised initially.

The attorney general’s office describes how StubHub uses a countdown clock to create a “false sense of urgency” to ensure consumers are “pressured into the purchase out of fear that they risk losing the tickets.”

Since StubHub adopted this pricing model in 2015, the company has sold almost 5 million tickets to Washington, DC, consumers alone, generating $118 million in “hidden” fee revenue, according to the attorney general’s office.

“StubHub lures consumers in by advertising a deceptively low price, forces them through a burdensome purchase process, and then finally reveals a total on the checkout page that is vastly higher than the original advertised ticket price,” Schwalb said in a statement on Wednesday. “This is no accident—StubHub intentionally hides the true price to boost profits at its customers’ expense.”

In response, StubHub’s deputy general counsel John Lawrence said in a statement that the company is “committed to creating a transparent, secure and competitive marketplace to benefit consumers.”

“We are disappointed that the DC Attorney General is targeting StubHub when our user experience is consistent with the law, our competitors’ practices, and the broader e-commerce sector,” Lawrence said. “We strongly support federal and state solutions that enhance existing laws to empower consumers, such as requiring all-in pricing uniformly across platforms.”

According to the lawsuit, StubHub did use an “all-in pricing” model from 2014 to 2015 where the advertised prices included the mandatory fees.

However, the company abandoned that more transparent model after testing found that customers were more likely to ultimately buy tickets when those fees are only shown at the end, the lawsuit said.