DC attorney general sues StubHub over deceptive ‘drip pricing’ practices

Jul 31

Karah Rucker Anchor

By Karah Rucker (Anchor), Brock Koller (Producer), Ian Kennedy (Video Editor)

District of Columbia Attorney General Brian Schwalb, D, is accusing StubHub of illegally misleading consumers by adding surprise fees to the end of a lengthy checkout process. In an announcement about the lawsuit, Schwalb said the company is engaging in “deceptive, manipulative and unfair practices.

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The lawsuit, filed on Wednesday, July 31, said StubHub does not provide clear and accurate information on the purpose of the fees or show how they are calculated. This is practice is called “drip pricing.”

Drip pricing is when a company advertises one price but the customer somehow ends up paying a higher price. With StubHub, it is due to “fulfillment and service fees” added at the end of the purchase process.

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According to Schwalb, customers often have to navigate through a dozen pages before they check out, which is also a lengthy process. The checkout procedure features a countdown, which the lawsuit said creates a “false sense of urgency. The entire StubHub process has been documented page-by-page in the lawsuit.

“Faced with this inflated total and the countdown timer threatening to make [customers] start the whole process over, consumers are pressured into the purchase out of fear that they risk losing the tickets,” Schwalb said when he announced his lawsuit.

By suing StubHub, the attorney general seeks to end what he calls “StubHub’s deceptive practices,” asking for restitution for impacted customers. According to Schwalb, StubHub has made $118 million in hidden fees to D.C. consumers since 2015, when it dropped its “more transparent” and “all-in” pricing model, and instead adopted the drip pricing tactic.

Tags: Fraud, Lawsuit, Money, StubHub

[KARAH RUCKER]

STUBHUB IS BEING ACCUSED OF ILLEGALLY MISLEADING CONSUMERS — ADDING SURPRISE FEES TO THE END OF A VERY LENGTHY CHECKOUT PROCESS — AND THE D.C. ATTORNEY GENERAL IS NOT GIVING THE ONLINE TICKETING COMPANY A FREE PASS.

IN AN ANNOUNCEMENT ABOUT HIS LAWSUIT FILED WEDNESDAY – ATTORNEY GENERAL BRIAN SCHWALB SAYS STUBHUB IS ENGAGING IN A SERIES OF “DECEPTIVE, MANIPULATIVE, AND UNFAIR PRACTICES.”

THE LAWSUIT SAYS STUBHUB FAILS TO PROVIDE CLEAR AND ACCURATE INFORMATION ON THE PURPOSE OF THE MANDATORY FEES IT TACKS ON TO AN ORDER OR REVEAL HOW THEY ARE CALCULATED. Stub Hub image

THE PRACTICE IS SOMETHING CALLED “DRIP PRICING” – WHEN A COMPANY ADVERTISES ONE PRICE BUT THEN THE CUSTOMER ENDS UP PAYING A HIGHER ONE – IN THIS CASE — DUE TO “FULFILLMENT AND SERVICE FEES” ADDED AT THE END OF THE LONG PURCHASE PROCESS.

SCHWALB SAYING OFTEN STUBHUB’S CUSTOMERS HAVE TO NAVIGATE THROUGH A DOZEN PAGES BEFORE THEY CHECKOUT – A PROCESS DOCUMENTED PAGE BY PAGE IN THE LAWSUIT.

AND TO GO WITH THE LENGTHY CHECKOUT PROCESS — A COUNTDOWN CLOCK WHICH THE ATTORNEY GENERAL SAYS CREATES A QUOTE “FALSE SENSE OF URGENCY.”

IN ANNOUNCING HIS LAWSUIT, SCHWALB SAYS, “FACED WITH THIS INFLATED TOTAL AND THE COUNTDOWN TIMER THREATENING TO MAKE THEM START THE WHOLE PROCESS OVER, CONSUMERS ARE PRESSURED INTO THE PURCHASE OUT OF FEAR THAT THEY RISK LOSING THE TICKETS.”

WITH HIS LAWSUIT — THE DC ATTORNEY GENERAL SEEKS AN END TO WHAT HE CALLS STUBHUB’S DECEPTIVE PRACTICES AND IS LOOKING FOR RESTITUTION FOR IMPACTED CONSUMERS. SCHWALB SAYING STUBHUB MADE 118 MILLION DOLLARS IN HIDDEN FEES TO D.C. CONSUMERS SINCE 2015 WHEN IT DROPPED ITS “MORE TRANSPARENT” “ALL-IN” PRICING MODEL AND ADOPTED THE “DRIP PRICING” TACTIC.

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