Early thoughts on return of BOSS ACT – National Consumers League

By John Breyault, Vice President of Public Policy, Telecommunications and Fraud

Last week, Congressman Bill Pascrell announced his intention to reintroduce the Better Oversight of Secondary Sales and Accountability in Concert Ticketing Act, or BOSS ACT.  While the bill hasn’t been introduced formally, we do have an idea of what will likely be in the bill based on press accounts from the Paramus Post. This is an important bill for ticket-buying consumers, so let’s dig in to the details.

New provisions

The new BOSS ACT includes the same provisions of the 2009 version of the bill as well as some new parts that seek to address some of the anti-consumer practices that have become more prevalent in recent years. First up, ticket-buying “bot” software:

The bill will make it a crime to use computer software to circumvent the security features of a ticket selling website or flood it with requests. The bill also establishes tough civil and criminal penalties for this behavior, ensuring that this provision will be an effective deterrent.

The bill will create a task force at the Department of Justice dedicated to investigating these crimes

Ticket “bots” are software programs that are used try to get around ticketing website security measures (think captchas, trivia questions, etc.) and flood the ticket queue with requests.  The goal is to buy up choice seats before regular ticket-buyers (i.e., you and me hovering over our mice at 10 a.m. Saturday morning) have a shot at them.  All too often, they succeed. The most infamous of these operators was Wiseguy Tickets, an outfit that used such software to suck up more than 1.5 million tickets that they then resold for more than $25 million in profit before the FTC and state attorneys general caught up with them in 2010.  Unfortunately, there are likely dozens, if not hundreds of Wiseguy clones still cutting the front of the line and sucking up the best seats, particularly for high-demand events.

Many states have already made ticket “bots” illegal.  However, given the interstate nature of most “bots” (they operate on the Internet, after all), it makes sense to address the problem on a national scale.  Just as importantly, the BOSS ACT directs the DOJ to investigate the issue, which should highlight the extent of the problem.  Indeed, getting serious about “bots” is exactly what we invited primary ticketers like Ticketmaster to do when we invited them to a dialogue on this issue earlier this year (still waiting on your response, guys!).

The next two new provisions address an issue that has been an increasingly hot topic in the live event industry over the past year – paperless tickets:

  1. The bill requires a refund option all non-transferrable paperless tickets if requested up to two weeks before date of the event.
  2. The bill further requires that if paperless tickets are made transferrable, one transfer at face value must be permitted with no fees, and requires primary sellers to issue third-party platforms licenses to facilitate transfers if they are permitted over the face value.

NCL has expressed concerns about restrictive paperless tickets that prevent consumers from giving away, trading or selling their tickets.  A two-week refund window may help consumers who buy a paperless ticket and then can’t make the event.

Making transferrable paperless tickets fee-free for the first transfer and requiring the issuance of third-party licenses for resale is a good first step.  We would urge, however, a stronger protection that ensures consumer choice in the secondary market.  New York state has a strong law that requires ticket companies to give consumers the option of purchasing a traditional paper ticket if an event has paperless tickets.

Returning provisions
Primary market regulations

  • Disclosure Requirements – primary ticket seller must make public the total number of tickets offered for sale to the public, disclose all tickets being withheld from public sale (e.g. fan clubs, pre sales, artists allocations) and the number of tickets held back under each method, disclose all ancillary charges to customers when the price of tickets are advertised, and print these charges and total cost on each individual ticket.
  • Prohibits registered ticket brokers from purchasing tickets during the first 48 hours of the primary sale.
  • Requires the primary seller to refund all ancillary charges, in addition to the base ticket cost, when concerts or other events are cancelled.

These are all pro-consumer protections.  In particular, the disclosure requirements will help to shed light on the pernicious issue of undisclosed ticket holdbacks.  It’s a dirty little secret in the concert industry that much of the inventory that appears on the secondary market comes not from ticket “bots” but from tickets obtained through fan club pre-sales, credit card rewards clubs and artist, promoter and venue allocations. Katy Perry, for example, required ticket allocations for resale for her 2011 world tour and the U.K, investigative program “Dispatches” exposed other cases of ticket holdbacks earlier this year.

Secondary market regulations
Secondary ticket sellers will be required to register with the FTC and provide basic contact information (phone number, address). Each broker will receive a unique identifier number.

Disclosure requirements – secondary ticket sellers must disclose the following information when offering a ticket for resale:

  • The face value of the ticket (including ancillary charges)
  • The original distribution method or how the seller obtained the ticket.
  • The precise location of the seat, or if this information is not available, descriptive information about the location (such as row or section)
  • The broker’s FTC identifier number.
  • A clear statement whether or not the seller possesses the ticket at the time of the sale.
  • Clear indications on secondary resale websites that they offer tickets for resale so that consumers are properly informed.
  • Primary ticketing companies, artists, promoters and their employees will be prohibited from reselling tickets to any event that their employer is involved in hosting, promoting, performing in, or ticketing for more than face value, or reselling tickets to parties with actual knowledge that they have the intention of reselling for higher than face value.
  • Artists, promoters, venues, and primary ticketing sites must disclose publicly when they are selling tickets directly online secondary marketplaces.

These provisions will do much to address the problem of brokers setting up look-alike websites that mimic the sites of venues and confuse customers into thinking that they are buying primary tickets instead of resale tickets. Speculative selling –the practice of selling tickets the seller doesn’t actually have in hand – would also rightfully need to be disclosed.  Sections 4 and 5 essentially prohibit resale above face value by anyone associated with an event and requires that even face value resale by such a person be disclosed.

In sum, the new BOSS ACT has a lot to like from a consumer point-of-view. Getting serious about the ticket “bot” problem is long overdue and the transparency requirements would do much to address the opaqueness of the industry at all levels. We appreciate  Congressman Pascrell’s leadership on this important and often overlooked consumer issue.

The bill’s provisions on paperless ticketing are a good place to begin discussion of this important issue.  We think that the bill could be made even stronger, however, by adopting the New York State standard and required that consumers have the option of getting a transferable paper ticket if an event is using paperless ticketing.

The new BOSS ACT has yet to be introduced formally, so we won’t know for sure what’s in it.  Until then, we’ll be keeping a close eye on developments in Congress that affect the ticket-buying consumer.