Nevada Ticket Resellers Face Class Action Lawsuits Over Hidden Fees

Ticket resellers in the well-known gambling destination Nevada, including popular platforms SeatGeek Inc. and Vegas.com LLC, are currently facing class action lawsuits. These lawsuits, filed by Kemp Jones LLP attorney Michael Gayan, center around accusations of hidden fees that allegedly mislead consumers.

SeatGeek and Vegas.com are two well-known online ticket resale platforms in the U.S. SeatGeek, established in 2009, serves as a marketplace where users can buy and sell tickets for various events such as concerts, sports games, and theater performances. The platform is known for aggregating tickets from primary and secondary markets and providing a user-friendly mobile app that helps customers find and purchase tickets. Vegas.com, on the other hand, specializes in Las Vegas-based events, offering tickets for concerts, shows, and attractions, along with hotel and travel booking services. The site aims to provide a one-stop shop for tourists visiting Las Vegas, making it easier for users to plan their entertainment experiences in the city. Both platforms are recognized for their wide selection of tickets and convenient services for users looking to attend live events and experiences.

Class Action Lawsuits Filed Against SeatGeek and Vegas.com

The legal actions against SeatGeek and Vegas.com involve two individuals, Mars Carbonell and Rachel Cachon, who are represented by Gayan. Carbonell, a Las Vegas resident, filed the lawsuit against SeatGeek, while Cachon, a resident of Glendale, California, is the plaintiff in the case against Vegas.com. Both individuals used the respective platforms to purchase tickets, unaware of the additional charges that would appear later in the purchasing process.

The Core Issue: Hidden Fees and Drip Pricing

At the heart of both lawsuits is the issue of “drip pricing,” a controversial pricing technique. This method involves advertising a product at an initially low price, only for additional fees to be added during the checkout process, just before the final transaction is completed. Consumers are often not aware of these fees when they first view ticket prices, which are advertised as free of extra charges. The lawsuits claim that this tactic is deceptive and violates Nevada’s consumer protection laws.

How Drip Pricing Works

Drip pricing, as described in the lawsuits, involves resellers like SeatGeek and Vegas.com advertising artificially low ticket prices to attract consumers. As the customer progresses through the checkout process, more charges are revealed. These additional fees often inflate the final price, but by that point, the consumer is already committed to the purchase, having entered credit card and other personal information. This tactic, the lawsuits argue, misleads consumers and unfairly affects their purchasing decisions.

Legal Claims and Potential Consequences for the Resellers

The legal actions seek statutory and compensatory damages, which could be determined by the court or jury. Additionally, the lawsuits demand prejudgment interest, reimbursement of attorney’s fees, and restitution for the affected consumers. Both lawsuits also call for a declaration that SeatGeek and Vegas.com violated Nevada law by engaging in drip pricing practices.

SeatGeek Responds to the Lawsuits

In response to the lawsuits, SeatGeek issued a statement acknowledging the ongoing legal proceedings. While the company refrained from commenting further on the litigation, a representative emphasized SeatGeek’s commitment to transparency. The representative also pointed out that SeatGeek has consistently advocated for consumer-friendly practices, including the ability for customers to view the total price, including fees, before selecting tickets. The company further expressed support for price transparency legislation at both the state and federal levels.

Other Drip Pricing Cases

Drip pricing, where companies advertise lower prices upfront but add additional charges during the checkout process, has been the subject of several legal challenges in the United States. A notable case involved the car rental industry, specifically with companies like Hertz and Avis. In these cases, plaintiffs accused the rental companies of misleading customers by advertising low daily rates but later adding mandatory fees for things such as insurance, taxes, and additional services. In 2016, a class action lawsuit against Avis and Budget Rent a Car resulted in a settlement that required the companies to clearly disclose all fees upfront. The case highlighted the need for better transparency in the rental car market, leading to changes in how pricing is presented to consumers. Under U.S. law, especially the Federal Trade Commission’s rules on deceptive advertising, businesses are required to disclose the total cost of a transaction, including all mandatory fees, before the consumer completes a purchase.

Another significant drip pricing case involved online travel booking websites, including Orbitz and Expedia, where consumers were led to believe they were paying one price for a hotel room only to find hidden booking fees added at the last stage of their transaction. In 2017, a class action lawsuit was filed against these companies, accusing them of deceptive pricing practices. The plaintiffs argued that the initial price quoted on the site was artificially low, and the additional fees that appeared during the checkout process significantly inflated the total price. The case ultimately resulted in a settlement that required the companies to improve their pricing disclosures. These legal battles reinforced the importance of full price transparency and set a legal precedent for ensuring that businesses provide accurate and complete pricing information upfront, preventing consumers from being misled at the final point of sale.

The Impact of the Lawsuits

These lawsuits bring to light ongoing concerns over transparency in the ticket resale industry. Consumers often encounter unexpected charges when purchasing tickets from online websites, leading to frustration and financial surprises. If the lawsuits are successful, the outcome could have significant ramifications for how ticket resellers disclose pricing in the future, particularly regarding the disclosure of fees upfront.

Drip pricing has also been a significant issue outside of the United States, particularly in Europe, where consumer protection laws have been actively enforced to combat deceptive pricing practices. One notable case occurred in the United Kingdom, where online ticket sellers, such as Ticketmaster and Viagogo, were accused of using drip pricing techniques. These platforms would advertise ticket prices without clearly disclosing additional mandatory fees, such as service or handling charges, which were only revealed during the final stages of the purchase process. In response, the UK’s Competition and Markets Authority (CMA) launched investigations into these practices, eventually leading to a crackdown on misleading pricing tactics. As part of the outcome, Ticketmaster agreed to improve its transparency by clearly displaying the total price, including all fees, before consumers proceeded to payment. Viagogo, another ticket reseller, was also pressured to overhaul its pricing methods after facing public backlash and regulatory scrutiny. The CMA’s intervention helped set stricter rules around price transparency, with companies required to advertise the full price upfront.

In the European Union, drip pricing has also attracted attention, particularly in the travel and e-commerce sectors. The European Court of Justice ruled in 2019 that companies engaging in drip pricing must clearly inform consumers about the total cost of a product or service, including all additional charges, before the final stage of purchase. This ruling stemmed from cases involving flight booking websites, where low initial ticket prices were advertised, followed by the addition of compulsory fees for luggage, seat selection, and other services. Under EU consumer protection regulations, businesses must ensure that the full price is transparent from the outset, with any additional charges disclosed at the first point of contact with the consumer. The ruling emphasized that businesses cannot mislead consumers with low prices that do not reflect the total cost, setting a legal precedent for more transparent pricing practices across EU member states. These regulations have led to changes in how companies disclose pricing in various sectors, including travel and entertainment, promoting greater fairness and transparency for consumers.

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