My Lords, I shall speak to Amendments 29 to 31. Although I think that I am singing very much from the same hymn sheet as the noble Lord, Lord Stevenson—I apologise if I go over some of the same ground because, as was the case in the Commons, these amendments are in parallel to those of the Labour Front Bench—these amendments follow directly from the conclusions and recommendations of the recent excellent report by the All-Party Group on Ticket Abuse. I happen to be a member of that group but, since I was not able to take part in the inquiry, I cannot claim any credit for it.
The amendments are not an attempt to shackle an important and growing service for consumers or to ban the resale of tickets. While accepting that there is a role for a legitimate secondary ticket market, the all-party group found considerable problems with how this market, which is estimated to be worth about £1 billion a year, works at present.
In particular, it does not adhere to the same principles of transparency and consumer protection to which other markets are held. With internet ticket selling becoming more streamlined, touts are able to use sophisticated computer systems to buy large volumes of tickets automatically, mere seconds or minutes after they are available online. That can often mean that it is practically impossible for genuine fans to access the event, forcing them to rely on an artificially created secondary market and depriving content creators of revenue for their event.
As the noble Lord, Lord Stevenson, mentioned, the Met Police published a comprehensive report on fraudulent ticketing and the dangers it posed to the Olympics. It specifically cited ticket fraud, touting and
ticket reselling websites as areas of concern. The report stressed the need for an open and transparent system for ticket reselling, with clear and appropriate regulations. The new clauses address those shortcomings and would increase consumer confidence in the secondary market.
The first two new clauses address the lack of transparency, which the noble Lord, Lord Stevenson, emphasised. Amendment 28 is about who is selling the ticket. It would place a duty on secondary ticketing platforms to provide basic identifying information about the individual or business offering a particular ticket or set of tickets for sale. It would allow consumers to say how prolific and reliable a particular seller was; that would make the secondary ticketing platforms much more transparent. Importantly, it would also require secondary ticketing platforms to be transparent in cases where the seller was also the event holder. The practice of events organisers secretly allocating whole blocks of tickets directly to the secondary market has been on the rise. It was the subject of the Channel 4 “Dispatches” programme broadcast in 2012, entitled “The Great Ticket Scandal”. There is also a dishonest practice whereby a secondary ticketing platform, or rather its employees or shareholders, buy and sell tickets themselves, as the “Dispatches” programme also exposed.
Amendment 29 relates to the transparency of the ticket itself. I was very interested in the introduction of the noble Lord, Lord Stevenson, when he talked about the ticket itself; in many cases, knowing the characteristics of a ticket would make a material difference to a buying decision, particularly in the case of seated events, in which a person’s position in the venue can make a significant difference to their enjoyment of the performance or experience. Providing that information would also give consumers the confidence that the individual or company selling the ticket actually had tickets in hand and was not just speculating that it would be able to provide them at a later date. Making sure that consumers are made aware of the original price of the ticket that they are buying at the earliest opportunity gives them another piece of the information that they need to make an informed choice about whether to enter into such a purchase. Any genuine fans who need to sell on their tickets should not have a problem providing the basic information about the product that they are selling; nor should any professional reseller. The secondary ticketing platforms which claim to have higher standards should therefore have no problem adapting to the new provisions.
Amendment 30 concerns the recourse available to consumers. There have been numerous reports of event-goers being turned away with counterfeit or invalid tickets that they have bought via the big four secondary ticketing websites, all of which heavily promote their reliability and guarantee that their tickets are genuine. Of course those websites offer refunds, but people who come to venues with unusable tickets have all incurred at least some travel cost getting there. In some cases, they have come from abroad for the express purpose of using the ticket. For such people, a full refund on the ticket, while welcome, will still leave them out of pocket. The new clause would therefore allow those consumers to claim back the extra cost associated with attending an event, up to a reasonable level.
In practice, some resellers already offer reimbursement of travel costs. The new clause would place primary responsibility for that initial payback on the secondary ticketing platforms because they offer guarantees which, they say, consumers pay for in their significant service charges. However, having paid out that money, the new clause makes clear that the secondary ticketing platform may recover it from the seller of the ticket. The only individuals or businesses that the new clause would hurt, therefore, are those who have sold fake or invalid tickets and consequently caused financial loss to the consumer. The new clause would have the positive benefit of giving consumers the confidence that they would not be left out of pocket when they purchased tickets through the secondary market.
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In the Commons, my honourable friend Jenny Willott said:
“The Government agree that consumers should be protected from fraudulent, counterfeit and misleading ticket sales”.
She added that the new, updated Consumer Contracts (Information, Cancellation and Additional Charges) Regulations, “will come into force” in June this year,
“to empower and inform consumers”,
and that they would,
“ensure that consumers have all the information they need before they buy”.—[Official Report, Commons, 13/5/14; col. 691.]
That would include ticket sales.
I have had a careful look at these consumer contracts regulations and, although she was not specific, I think that she was referring to sub-paragraph (a) of Schedule 2, “Information relating to distance and off-premises contracts”, under which there is a duty on the seller to outline,
“the main characteristics of the goods or services, to the extent appropriate to the medium of communication and to the goods or services”.
That is a very general statement that requires considerable unpacking.
The guidance issued to the consumer contract regulations, as amended in June, poses a scenario headed, “I am a trader selling tickets online, what do I need to do?”. Paragraph 17 states:
“Schedule 2 of the Regulations lists the information you must provide to the consumer. Information on the main characteristics of the tickets and their total price (including delivery costs and other charges) must be given to the consumer in a clear and comprehensible way before the consumer purchases the ticket. Main characteristics include (if known to you) the date and time of the event and the content of the event”.
That is the trouble. It does not specify the information that must be provided in the same way as the clauses that we are setting out today. Effectively, it is at the discretion of the trader because the trader can plead ignorance in these circumstances. That may be a fallible interpretation of the guidance and may not be the intention of the regulations, but I do not believe that the regulations go nearly far enough in providing that kind of consumer security.
My honourable friend went on to say:
“In addition, from October of this year we are making it easier for consumers who have been misled by a trader to take their own action to get their money back and, if appropriate, to get damages as well”.
I was very interested in that reference, which almost harks back to our earlier debate about ADR. I would be very grateful for chapter and verse on exactly what my honourable friend was referring to in that Commons debate. She said:
“Armed with that information and access to redress, consumers will be empowered to make use of the market for their benefit and hopefully not fall victim to fraudulent, counterfeit or misleading ticket sales”.
That is the second limb of my question to my noble friend.
On compensation, my honourable friend said that,
“the first port of call should be for the industry to source a solution. Some of the larger event organisers … already have refund procedures in place”.
However, she admitted that some,
“smaller players … have chosen not to”.—[Official Report, 13/5/14; col. 691.]
That is the flaw in the whole argument. The big four sellers are powerful players. It is part of their unique selling proposition that they guarantee and make refunds that are more generous than simply refunding tickets; they sometimes compensate for travel costs and so on. But that is not true of many other players, and it is certainly not true of the ordinary ticket tout. I do not believe that voluntary action in these circumstances is adequate. I would like to think that in the best of all possible worlds traders will get together and have a common standard of service and so on, but I do not believe that that will happen unprompted by legislation. I am not moving an amendment but I beg to lay my wares before the Minister.