Federal officials announced on Friday that three New York ticket brokers have agreed to pay $3.7 million in civil penalties 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 of Long Island — were accused of violating the Better Online Ticket Sales Act, which is designed to prevent brokers from evading ticket-purchasing limits set by online ticket sellers like Ticketmaster. It also prevents the resale of tickets obtained by knowingly engaging in such practices.
The settlements are the first enforcement actions that the Department of Justice and the Federal Trade Commission have brought under the law enacted in 2016.
“Those who violate the BOTS Act cheat fans by forcing them to pay inflated prices to attend concerts, theater performances and sporting events,” Seth D. DuCharme, the acting U.S. attorney for the Eastern District of New York, said in a statement. “This Office will spare no effort in prohibiting deceptive practices that harm consumers.”
The lawsuits against the three companies, filed by federal prosecutors on Long Island, had accused the brokers of reselling thousands of illegally obtained tickets for millions of dollars in revenue between Jan. 1, 2017, and the present day, often at significant markups.
The companies are accused of creating accounts in the names of family members, friends and fictitious individuals and using hundreds of credit cards to snap up the best seats at sporting events and concerts.
They also are accused of using ticket bots, or automated software, to evade safeguards designed to bar nonhuman ticket purchases and to conceal the IP addresses of the computers they were using.
The three companies were assessed higher civil penalties as part of the settlement, with Concert Specials agreeing to pay the largest settlement of $16 million. But each were released from paying the full penalties if they agreed to pay amounts ranging from $1.64 million to $499,000 and to satisfy certain additional terms, including submitting compliance reports to the government.
The office of the attorney general of New York had previously reached settlements worth $2.76 million in 2016 with six ticket brokers, following a report that exposed widespread abuses in New York’s ticketing industry. The report found that bots were in widespread use, with one high-tech scalper buying more than 1,000 tickets in less than a minute to a U2 show at Madison Square Garden.
Resale brokers are required to have a license from the state, but the report found that many do not.
A lawyer who represented the three companies declined a request for comment.