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Consumer Law Update: online resellers under the spotlight

Home Insights Consumer Law Update: online resellers under the spotlight

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Contributed by: Joe Edwards, Troy Pilkington and Hannah Loke

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Published on: March 19, 2018

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The New Zealand Commerce Commission is warning event-goers to "have their eyes wide open" when purchasing tickets from reselling websites such as Viagogo, after receiving numerous complaints from disgruntled customers.

The Commission is investigating Viagogo in relation to potential false and misleading representations under the Fair Trading Act, and has received over 200 customer complaints. So far, the complaints have related to issues such as:

  • customers not receiving their tickets, or receiving tickets that did not have the features as advertised;
  • being sold fake tickets;
  • not being able to contact Viagogo to obtain refunds;
  • Viagogo making representations that they were an official ticket seller; and
  • Viagogo creating a sense of urgency by stating that only limited tickets were still available for an event, or they were selling very quickly, when this was based only on supply through Viagogo, rather than for the event as a whole.

Stories of customers being disappointed after purchasing tickets on reselling sites are becoming increasingly common. For example, a mother and her son were turned away from a Bruno Mars concert at Vector Arena after being informed that the tickets they had purchased via Viagogo were fake.1 Another woman spent $3,000 through Viagogo to secure tickets to an Adele concert in Melbourne, but when she arrived at the concert (months later) she was told her tickets had already been refunded by the original buyer and therefore would not be accepted.2

In New Zealand, it is not illegal to resell tickets for a higher price than what was originally paid, unless the seller engages in misleading or deceptive conduct, or the event is one covered by the Major Events Management Act 2007.3 Since the Act has been in force, only sporting events have been designated Major Events – such as the 2017 Lions rugby tour of New Zealand, and the upcoming Gold Coast 2018 Commonwealth Games.

New Zealand is not the only country currently taking action against ticket reselling sites:

  • The UK Advertising Standards Authority has instructed four ticket reselling sites, including Viagogo, to be more transparent with their fees and charges. It has also banned Viagogo from calling itself an "official site" and claiming a "100% guarantee of entry", on the basis that both statements are misleading.
  • The Australian Competition and Consumer Commission (ACCC) is bringing a claim against Viagogo in the Australian Federal Court for alleged misleading and deceptive conduct. The ACCC claims Viagogo failed to disclose "significant and unavoidable fees" up-front to customers, and also created the impression that tickets were scarce, without disclosing that those statements were in reference to supply on its own site only.

As online selling (and reselling) platforms become increasingly common in all areas of business, from concert tickets to hotel rooms to clothing, we expect the New Zealand Commerce Commission and the New Zealand Advertising Standards Authority will have an increasing focus on ensuring that such websites conduct themselves in a way that avoids consumers being misled. Businesses in that space should be reviewing their advertising and selling practices to ensure their representations are clear and accurate, and that they can actually deliver what they say they are selling.

If you have any questions as to how these developments may affect you or your business, please contact one of the authors below.

FOOTNOTES
  1. Laura Tupou "Fake Mars tickets: 'Buyer beware'" (1 March 2018) Stuff. Accessible here.
  2. "'No one to turn to': Adele fan loses $3000 after buying tickets on Viagogo" (5 April 2017) Stuff. Accessible here.
  3. More information on ticket reselling can be found here.

This publication is intended only to provide a summary of the subject covered. It does not purport to be comprehensive or to provide legal advice. No person should act in reliance on any statement contained in this publication without first obtaining specific professional advice. If you require any advice or further information on the subject matter of this newsletter, please contact the partner/solicitor in the firm who normally advises you, or alternatively contact one of the partners listed below.

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