Federal officials announced Friday that three New York ticket brokers agreed to pay $ 3.7 million in civil fines to settle allegations that they bought tens of thousands of event tickets and resold them to customers at inflated prices.
The companies – Just in Time Tickets, Concert Specials, and Cartisim Corp., all located in Long Island – were charged with violating the Better Online Ticket Sales Act, which is designed to prevent brokers from circumventing ticket buying limits that are set by online ticket sellers such as Ticketmaster. It also prevents the resale of tickets obtained by knowingly participating in such practices.
The settlements are the first enforcement action brought by the Department of Justice and the Federal Trade Commission under the 2016 law.
"Those who violate the BOTS Act are defrauding fans by forcing them to pay high prices to attend concerts, theatrical performances and sporting events," Seth D. DuCharme, the acting US attorney for the Eastern District of New York, said in a statement . "This office will do everything it can to ban deceptive practices that harm consumers."
The lawsuits against the three companies, brought by federal prosecutors in Long Island, had accused the brokers of reselling thousands of illegally obtained tickets for millions of dollars in revenue between January 1, 2017 and the present, often for significant fees.
The companies are accused of creating accounts in the names of family members, friends and fictional individuals and using hundreds of credit cards to secure the best seats at sporting events and concerts.
They are also accused of using ticket bots or automated software to circumvent security measures designed to block non-human ticket purchases and hide the IP addresses of the computers they used.
The three companies were fined higher civil fines as part of the settlement, with Concert Specials agreeing to pay the largest $ 16 million settlement. But each was exempt from paying the full fines if they agreed to pay amounts ranging from $ 1.64 million to $ 499,000 and to comply with certain additional conditions, including filing compliance reports with the government.
The New York Attorney General's office had earlier reached $ 2.76 million settlements with six ticket brokers in 2016, following a report that revealed widespread abuse in the New York ticket industry. The report found that bots were in widespread use, with a high-tech scalper buying more than 1,000 tickets to a U2 show at Madison Square Garden in less than a minute.
Resale brokers must be licensed by the state, but the report found that many do not.
A lawyer representing the three companies declined a request for comment.