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Regulating the Resale Ticket Market

October 23, 2015

Ahead of next Wednesday’s blog about this, the following was released today:

Members of the Society of Ticket Agents and Retailers (STAR), the self-regulatory body for the entertainment ticket industry, have voted in favour of developing a Code of Practice for online ticket resale marketplaces.

Despite controversy around resale, reputable online marketplaces can provide a safe environment for people offering to resell tickets to transact with potential buyers. These marketplaces are therefore distinct from unscrupulous websites where customers are defrauded by sellers that do not have the claimed tickets to supply or even have a deliberate intention to take money but never supply tickets.

Chief Executive of STAR, Jonathan Brown, said “Customers deserve clear information about where they can buy tickets safely. STAR recognises that the UK ticketing industry has rapidly changed in recent years and today’s consumers expect greater levels of choice and protection. They need to know how and where they can buy tickets safely, whether they choose to buy them from the primary or secondary sectors. To increase clarity for ticket buyers, STAR will therefore develop standards of best practice to which we hope resale businesses that take consumer protection seriously will subscribe.”

STAR already operates a Code of Practice for the primary ticket market to which all the major names in UK ticketing are signed up. The new resale code will establish similar high standards of service and information as well as requirements regarding consumer protection and rights, particularly around the security of customer payments and guaranteed refunds if tickets are not supplied.

It is expected that the Code will be developed over the next few months before being presented to the STAR membership for consideration in the New Year.  If the Code is approved and adopted by STAR members, resale marketplaces that can meet the demands of the Code would then be able to apply for membership.

The Government recently announced a review of consumer protection measures in the online ticket resale market and STAR looks forward to co-operating with that review. All STAR members are, of course, required to abide by the law. The new Code for resale will include reference to the specific requirements in the Consumer Rights Act and will be reviewed regularly to take into account any further changes in regulations.

Jonathan Brown added, “This is not about whether tickets should or shouldn’t be offered for resale or for how much they are sold. It is about pragmatically working to fill a gap in consumer protection by ensuring that customers are able to feel confident whenever they buy tickets and by improving standards even further in the legal ticket resale sector. We have to do all we can to be clear about the advice we give to customers to help them avoid illegal scam websites.  We need to stop them from giving money to fraudsters who prey on fans desperate to obtain tickets for sold-out events without any intention of delivering.”

FREQUENTLY ASKED QUESTIONS:

WHY IS STAR DEVELOPING A CODE OF PRACTICE FOR RESALE MARKETPLACES?
This is not the first time STAR has considered this development and a vote put to the membership in January 2009 came out in favour of opening STAR to ticket resellers. This followed an encouragement to STAR from the DCMS at the time to participate in the self-regulation of the ticket resale market.

However, given continuing uncertainties in the secondary market and the level of criticism and concerns surrounding it, the STAR Council took a pragmatic decision to postpone any changes pending a future vote.

In the intervening years, the online ticket resale market has become a more entrenched part of the live event and ticketing industries in the UK and is one of several recent “disrupters” in ticketing which have caused the industry to rethink how it does business.

In that time, and alongside detailed discussions and concerns in the industry and at Government level about the operation of the secondary market, many thousands of customers have become accustomed to trading tickets on marketplaces and some major venues and sports and entertainment events are working with resale platforms as official partners.

STAR’s focus is the protection of ticket buyers and customers buying from a ticket resale industry that complies with current legislation deserve high standards of service, information and an independent means of redress, in the same way that STAR and its membership already provide in the primary market.

WHO IS THE NEW CODE FOR?
STAR already operates a Code of Practice for its members working in the primary ticket market.  This new development will only cover online ticket resale marketplaces, ie platforms that provide the facility for people to sell and buy tickets. One crucial factor in the resale Code will be a requirement that those companies operate a reliable guarantee to ensure customers gain entry to the event for which they have purchased tickets or, if they fail to do so, to refund the customer.

HOW DID YOU GET TO THIS POINT?
STAR’s relationship with resale marketplaces has been the subject of discussion for many years and it was something the STAR Council decided to return to following the introduction of  the Consumer Rights Act earlier this year, which included some specific legislation for the sector.

A consultation period with STAR members began in June 2015 and came to an end with a question put to the membership. Members were asked whether STAR should develop a Code for online ticket resale marketplaces with a view to eventually  extending membership to platforms that sign up to that Code.  A clear majority of members indicated their approval of this development.
The Council and STAR membership are aware of the debates that continue in respect of ticket resale, including the work of the All Party Parliamentary Group on Ticket Abuse and the forthcoming Government review on consumer protection measures in the secondary ticket market. The Code will look to draw together some of the key factors that distinguish existing best practice and to provide clearer information to customers and greater transparency and accountability in the resale sector. There may of course be more to add to this in the future in respect of outstanding issues to be covered by the Review and any new regulations that might follow.
The Code will be developed over the coming months and it is expected that the draft will be put to the STAR membership for their consideration early in 2016. The Code and any necessary amendments to STAR’s constitution will need to be approved by the existing membership before they can be implemented.

Should a Code be agreed upon, the intention is that it will be reviewed regularly to ensure it reflects any changes to best practice or regulations and particularly any legislative changes that come about as a result of the work of the current Government review.

HOW DOES THIS FIT IN WITH STAR’S NOVEMBER CAMPAIGN ABOUT SAFE TICKETING? IS THE TIMING DELIBERATE?
STAR has undertaken similar campaigns in the past to increase awareness of safe ticket buying through its members and there is no correlation in the timing between these two distinct initiatives – the development of the new Code and the November awareness campaign.

The decision by the STAR membership to move forward with developing a Code for resale marketplaces, which comes after many years of consideration, discussion and participation in debates around the secondary market, comes following the introduction of the Consumer Rights Act.  It leads into a process that will take several months to complete and will not reach a conclusion until well past the date of the awareness campaign.

Collectively, we have an important job to do in helping to tackle ticket fraud by reducing the number of customers using websites operating outside the law and deliberately seeking to take money with no intention of supplying genuine tickets.

IS THE TIMING MEANT TO AFFECT THE GOVERNMENT’S REVIEW ON TICKETING?
No.  STAR returned to the issue following the passing of the Consumer Rights Act 2015.  STAR’s intention is pragmatic, seeking the protection of ticket buyers who deserve high standards of service, information and an independent means of redress in the same manner that STAR and its membership provide in the primary market.

STAR is very conscious that there are issues about the secondary market that continue to cause concern and to be discussed. The Government review is an important part of this. STAR will, along with others, be making a submission to the Review before 20 November and we look look forward to co-operating with the Chair and his panel in any way that we can.  We recognise that the Review will be looking at concerns about the way the market operates and that this may lead to future regulatory changes. The new STAR Code will reflect current legislation, including the Consumer Rights Act 2015.  If approved, it will be updated in future to include any changes to legislation that may take place following the Review.

WHAT MIGHT THE CODE INCLUDE?
The drafting of the Code will be a significant piece of work. The following are examples of what might be included but these would of course be subject to proper review to ensure consumers are best protected:
Offering the Customer adequate means of protection to include the payment by the Resale Agent of a refund (or, where available, the provision of replacement tickets) where a Customer: (i) does not receive the tickets s/he ordered in time for the event; (ii) receives tickets that do not materially conform to the description advertised by the seller on the Marketplace, or (iii) is denied entry to the venue through no fault of the Customer.
Prohibiting the listing of speculative tickets by sellers.
Detailing the Resale Agent’s policies and procedures if an event is cancelled or postponed.
Ensuring that they have adequate accounting and security arrangements in place when handling deposit monies from Customers.
Agreement to submit to the exclusive jurisdiction of the courts of England/Wales/Scotland/Northern Ireland where the Customer is based.
Creating a trusted environment where customers feel confident in listing tickets for sale and making purchases.
“Know your customer” identification processes and procedures with respect to sellers that are extended financial credit, if any.
Terms should disclose that prices set by its third party sellers may be higher or lower than the Face Value Price of the ticket.
If purchases are final, disclosing that a Customer may not change or cancel their order.
Requiring that sellers comply with all applicable laws and regulations in respect of the sale of the ticket.
Advising that sellers must provide an accurate ticket description, including describing seating arrangements, Face Value Price, and any ticket restrictions
Describing a seller’s obligations to deliver a ticket in a timely and secure fashion once a sale occurs.
Describing fees and other charges that may be applied to sellers for ticket issues, including delivery of incorrect tickets, failure to deliver tickets on time or delivery of invalid tickets.

AREN’T YOU JUST LEGITIMISING TOUTING?
STAR’s purpose is to ensure customers are provided with clear information to enable them to navigate the legitimate ticket market and to ensure our members provide high standards of service and information through a Code of Practice. We believe customers deserve better information which will help protect them when buying tickets in both the primary and secondary sectors and divert them from handing money over to those deliberately setting out to defraud them.
Creating a Code around existing best practice within the legal operation of resale marketplaces and encouraging those that can to subscribe to that Code will provide a framework for any future developments and improvements as well as providing clearer information for ticket buyers.

STAR acknowledges that there are continuing criticisms of and concerns about the way the sector operates and remains actively interested in participating in discussions around these issues, including through  the Government Review. Should there be any future changes in the law regarding the sale or resale of tickets, STAR would of course incorporate those in a revision to the Code.

WHAT IF EVENT ORGANISERS DON’T WANT THEIR TICKETS TO BE RESOLD?
There are systems available to help restrict the resale of tickets, should organisers choose to use them.  These include, for instance, the considerable and successful measures taken by Glastonbury Festival, paperless ticketing and the exchange of tickets on arrival at the event with identity checks in place. Event organisers and venues can therefore make a decision regarding any restriction on resale, take appropriate action and control access. Doubtless other solutions will be developed in the coming years.
Event organisers should also consider what measures they employ to enable customers to return or resell tickets if they are unable to use them. A system of either authorised resale or the opportunity to cancel tickets and obtain a refund should be in place.

WHAT ABOUT SPECULATIVE TICKETING?
As noted above, our Code would specifically prohibit the listing of tickets for which there is no known supply or that are listed before tickets could ever be available for the event on the primary market. Marketplaces would be expected to check for such listings and remove them.
WILL YOU STOP THE HIGH PRICES CHARGED BY RESELLERS?
For good reasons regarding competition law, STAR is not a position to restrict the price of tickets or charges in the primary market any more than it would be able to do so in the resale market.

Transparency on pricing is certainly important and, in line with the existing STAR Code of Practice for the primary market, we would include the requirement – already detailed in the Consumer Rights Act – that the face value price should be provided as key information to prospective buyers.
The primary ticket market has responded to the fact that some customers are willing to pay higher prices, particularly for late availability for events that are selling well, by introducing premium and dynamic pricing.  Market responsive pricing has therefore developed in ticketing in a way that is already familiar in the travel and hotel industries.
WHAT ABOUT TICKET BOTS?
‘Ticket Bots’ are computer programs that automatically breach existing obstacles such as ‘Captcha’ and procure tickets from the primary market when they first go on sale with the express intention of reselling them for profit in the secondary market.  This can remove the availability of a large number of tickets from customers who should not need or be forced to seek tickets at a higher price in the resale market due to the unfair harvesting of tickets using bots.  At present, there is no clear legislation relating to this sort of automated buying and potential skewing of the market for popular events. Action needs to be taken to prevent the use of ticket bots, or other technology with the same purpose, and to ensure the practice is illegal under either existing or new legislation. STAR is vehemently opposed to the use of this technology.
The Society of Ticket Agents and Retailers (STAR) is the self-regulatory body for the entertainment ticket industry. Charged with promoting excellent service and improving standards across the entertainment industry, STAR members work to a strict Code of Practice and a dispute conciliation service operates to help customers resolve outstanding complaints.
The Society’s many members include all the UK’s major authorised ticket agents as well as arenas, theatres, producers and promoters throughout London and the UK. Between them, members of STAR sell more than 30 million tickets a year.

Membership of STAR can be recognised by the use of the STAR kitemark and a full list of members is available at http://www.star.org.uk.
STAR is running an awareness campaign on 24 November to reach as many ticket buyers as possible with information about how to buy tickets confidently and avoid deliberate scams.
STAR is dedicated to ensuring high levels of customer service and ticket buyers who experience a problem with their purchase from a STAR member can contact the STAR helpline on 0844 879 4272, e-mail info (put the @ symbol here) star.org.uk or write to STAR, PO Box 708, St Leonard’s Place, York, YO1 0GT.

One Comment
  1. Frank permalink
    October 24, 2015 1:58 pm

    I can’t help but think that it’s “not about whether tickets should or shouldn’t be offered for resale or for how much they are sold”, because by regulating re-sale practise STAR is actually laying the groundwork for its existing members to tap into the lucrative secondary market sans any sense of trepidation, and with the gleam of ‘consumer protection’.
    You can’t convince me that self-regulation by a collective of commercial interests is not without self-seeking motives.
    I’m sure there’s a legitimate good intention buried down there somewhere underneath the heavy strata of capitalist zeal, but if it was a truly motivating factor, wouldn’t STAR be lobbying to combat the re-sale market point blank? After all, the secondary ticketing market serves nobody’s interest except those standing to profit financially – I won’t accept any argument pleading the case of the woeful ticketless who are now ‘fortunate’ enough to have their first-world fan problems solved by the blessed realms of glorified scalping. For that is what re-sale (exceeding face-value) is; whether you’re doing it from a rickety pop up booth on Charing Cross Road, or a nice shiny STAR-clad security code-encrypted website replete with a downloadable 10 page pdf copy of the Ts and Cs and a money-back guarantee – you’re a ticket scalper.

    Of course, I am speaking from the outside, as a mere paying consumer of tickets who is frustrated at the mushrooming financial hurdles that make planning a trip to the theatre a progressively less and less enjoyable experience. I realise this may skew my perspective, and will definitely lumber me with a bias. I will not apologise for this however.

    I await your response to the issue with interest.

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