A Lawsuit Against StubHub’s Predatory Sales Tactics
Prosecutors have filed a lawsuit alleging that online event platform StubHub is engaging in predatory sales tactics that deceive consumers and lead them to pay more for tickets. Washington, D.C. Attorney General Brian L. Schwalb claims that StubHub has been misleading consumers by hiding mandatory fees, which could increase the total cost of tickets by up to 40%. The lawsuit specifically targets the use of “drip pricing,” where companies initially set low prices but later add fees, deceiving consumers into paying more than expected.
The Deceptive Practice of Drip Pricing
Drip pricing is a phenomenon where companies change the terms of a deal over time, misleading consumers into paying more than they initially planned. By offering low prices upfront and gradually adding fees, companies like StubHub create a false sense of urgency and compel consumers to make purchases. This tactic violates consumer protection laws in the District of Columbia, which require merchants to provide truthful information about the products they sell.
The Impact on Consumers and Proposed Actions
Consumers are often manipulated into paying more than they intended due to drip pricing, as they are lured into a lengthy purchasing process that obscures the final cost of tickets. Washington, D.C.’s Attorney General’s Office estimates that consumers have paid StubHub $118 million in hidden fees. The office aims to stop StubHub from using these deceptive tactics and seeks to recover the fees paid by consumers in Washington.
Overall, the use of drip pricing not only harms consumers by leading them to make unintended purchases or pay higher prices but also creates unfair competition in the marketplace. It is essential for companies like StubHub to be transparent about their pricing to ensure a fair and honest consumer experience.
