My Lords, I am grateful to the Minister for the time that she has devoted to this issue. She shares the passion for sport and the arts of the movers of the amendment and has spent many hours with the governing bodies of sport, as well as event promoters and colleagues hearing our case. Before I speak to the amendment, I will set out the scale of the problem and then address the current legislation, which I will argue has been proven to be ineffective. I will then explain the rationale for this amendment. At all stages, I will draw on the position taken by the Minister at Second Reading and in Committee and look to match the arguments so e1oquently made then by my noble friends Lord Clement-Jones and Lady Heyhoe Flint, the noble Lord, Lord Pendry, the noble Baroness, Lady Grey-Thompson, and the noble Lord, Lord Stevenson.
The size of the problem is well documented. I refer the House to an extract from the National Fraud Authority’s Annual Fraud Indicator of 2013—the National Fraud Authority was then the executive agency funded by the Home Office. The report states:
“Online ticket fraud £1.5 billion … Online ticket fraud occurs when victims purchase tickets for an event such as music, sport, theatre or a performance, which do not materialise. These tickets are often purchased from fake ticketing websites and through online auction and shopping sites … Research carried out by the OFT in September 2009”—
three years after the passing of the Fraud Act, which was meant to deal with these issues—
“identified that 1 in 12 of those surveyed admitted to being caught by scam websites. The survey also showed that about eight per cent were a victim of online ticketing fraud, having bought music, sport or theatre tickets from a website that appeared to be genuine … The NFA has calculated an annual fraud loss estimate using the prevalence rate identified in the OFT survey multiplied by an average fraud loss of £637 per victim identified by Action
Fraud in relation to online ticketing fraud during 2012 … Based on this data, an estimated 2.3 million people fall victim to this type of fraud each year, resulting in losses of £1.5 billion”.
The Government are on record as saying that this is not a major issue. I would argue that £1.5 billion lost to consumers is a major issue requiring urgent action.
One can look simply at the evidence of the past 12 months and take some random examples. On 23 February last year, 80 people arrived excitedly at the O2 Arena to see One Direction only to find out that the tickets they were holding were not going to let them in. Of the 80 tickets, 40 were sold through viagogo. The next biggest source was Seatwave and the rest were bought through GET ME IN! and eBay. In July last year, Stuart Cain, head of ticketing at Birmingham’s LG Arena said:
“On a big show where there are a lot of e-tickets you can get up to 100 people a night affected”.
In November 2012, fans of Mumford & Sons were left disappointed after the tickets they bought from controversial secondary ticketing seller viagogo for a gig in Portsmouth turned out to be fake. I am sure that noble Lords will have examples from their own experience of this serious issue.
I turn to current legislation. There was all-party support and agreement with the International Olympic Committee to deal with ticket touting for the 2012 Olympic Games. Under Section 31 of the London Olympic Games and Paralympic Games Act 2006, it was an offence to sell a ticket or anything that purported to be a ticket for an event held as part of the Olympics or Paralympics in a public place or in the course of a business without the written authorisation of LOCOG, the event managers. There was no secondary market and a fine up to level 5 on the standard scale—some £5,000—for anyone convicted of such an offence. With all-party support in both houses, we tackled the problem of ticket touting by making the secondary market illegal. In 2011, there was further legislation. The fine was upped by Parliament to £20,000, again, with all-party support and no requirement for this latter measure from the International Olympic Committee.
What were the lessons learnt from the Olympics on this subject? My noble friend Lord Clement-Jones reminded us in Committee that the Metropolitan Police did a lot of work and reported through Operation Podium after the Olympic Games the need for an open and transparent system for ticket reselling with clear and appropriate regulations. Secondary websites, the Met argued, should be required to publish details of the ticket being offered including the original face value, seat number and location. They should identify the seller, state whether the seller has the permission of the originator to resell the ticket and declare whether the tickets have been listed by the event organisers. That was the position of the Metropolitan Police. The All-Party Parliamentary Group on Ticket Abuse recommended amendments to the Bill along the lines of those before the House today.
Our amendment addresses the reselling of event tickets usually, but not always, for profit. It specifically does not pursue the route followed, with all-party support, for London 2012; namely, the criminalisation of the secondary market while leaving the primary
market completely unregulated. I believe that we need a secondary market. Everyone speaking to the subject in Committee emphasised the importance of an effective secondary market. There are often prima facie reasons why a “real fan” may feel the need to pass on a ticket. That includes the obvious scenario of when the purchaser has a spare ticket for which they cannot get a refund and so have no option other than to sell the ticket on the secondary market to recoup their expenditure. The Minister states that the consumers are protected by the Fraud Act 2006 and the Government have issued guidance on the 2013 regulations, specifically on tickets.
The Minister is also concerned that we would be regulating consumers. I agree with the Minister and would be the first to resist obtrusive consumer regulation. While it is wholly appropriate for, let us say, health and safety, it would not be here. That is why we propose, as your Lordships will have read, an amendment with a very light-touch approach which all genuine consumers should welcome for the transparency and empowerment that it would give them.
Just four, short, key facts are required. All that is now proposed is the name and location of the tickets and/or booking number, together with a tick box of whether resale complies with the terms and conditions. This takes about 15 seconds to type in—fractions of the time compared with what we have to go through to establish our profiles and register with a secondary selling site—but it gives the consumer the information he or she needs to check the validity of the ticket. Of course, it will not completely cease counterfeit activity but professional event organisers and all the sport governing bodies widely agree that this information will substantially reduce fraudulent activity in the £1.5 billion industry that is so damaging to consumers.
Having reviewed the Minister’s contribution to the early stages of the Bill, I believe that the Government may be unclear as to the distinction between a trader and a consumer. Surely anyone selling their £50 ticket for £500 on a website is no longer a consumer; they are automatically defined in law as a trader. It is not, as we have been told, relegislating. At present the information required in the regulations is only for traders and is only set out in guidance, not in the Bill. As I shall demonstrate, it is woolly, to say the least, and it is easily avoided. A review of thousands of tickets today on the online sites shows none complying with 2013 regulations. No one who has put their name to this amendment seeks to abolish the secondary market. We all seek to improve its operation in the interests of consumers, placing key best practice obligations in the Government’s 2013 regulations on the face of this consumer legislation.
I turn to the regulations on which the Government rely. I regret to say that you can drive a coach and horses through them. The fact that there is a £1.5 billion fraud market demonstrates that this is the case. As I have mentioned, the regulations apply only to sellers, who are defined as traders, and not to consumers selling to other consumers, as happens so often and is the business model for the secondary ticketing sites. Schedule 2 to 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 in a clear and comprehensible way before the consumer purchases the ticket. The main characteristics include—and here are the four key words, “if known to you”—the date and time of the event and its content; for example, who is performing. For a ticket associated with a particular reserved seat—say row A, seat 1—the seat number is a main characteristic that should be given to the consumer—if you know it. You do not have to find it out; you simply put it on there if you know it. That is fine, if you know it but, “Sorry, guv, didn’t know the date; sorry, guv, didn’t know who was playing; sorry, guv, didn’t know which seat it was or where it was in the stadium”. “I didn’t know” is a let-out clause as wide as the Blackwall Tunnel and as congested, full of unscrupulous ticket resellers. That is why the 2013 regulations are ineffective, as witnessed by their inability to impact the market and, in practice, are as good as being voluntary. That is why we need to address the £1.5 billion market that exists today.
One of the strongest arguments against the position that my noble friend took in Committee is that all the amendment would largely do is enforce what is currently set out in the guidance. It removes the loopholes that I have just mentioned and makes sure that it applies to secondary selling sites. If the Government feel that the guidance is sensible and required, it must follow that the Government cannot object to making the key elements of the guidance enforceable.
The Government argue that regulation of the marketplace is not needed, as these regulations provide effective legislation and that, if we legislate today, we would most likely push sales back underground and away from these legitimate marketplaces. However, as we are proposing only that four key elements of the existing regulations already approved by the Government should now be in the Bill, I can deduce only that the Government must believe that, if the regulations were properly followed, we would push sales underground. In other words, they must have been introduced to be ineffective. If so, we can only congratulate the Government on achieving this objective.
5.30 pm
The amendment is supported by 300-plus sport and recreation organisations represented by the Sport and Recreation Alliance. It has the strong support of all the major sports governing bodies, from the England and Wales Cricket Board to the Rugby Football Union, from the Lawn Tennis Association to the Rugby Football League. If the House accepts the scale of the problem that I have outlined, the ineffectiveness of the current legislative approach and the vital principle in the Bill of protecting consumers, I hope that it will support the amendment.
We have had plenty of meetings, government reports, valuable reviews of the lessons learnt from the London Olympic and Paralympic Games, roundtables and consultation exercises. The Bill provides an opportunity for action on behalf of consumers, the many people who daily find themselves to be the victims of market abuse, the sports fans who turn up at the Ryder Cup in Gleneagles to be turned away, and our children and grandchildren who go to music festivals to be turned away. The amendment would go a long way to reduce
a massive problem. It is absolutely clear that regulating the secondary market is fundamental to stopping ticket crime and abuse. I beg to move.