As technology evolves, so do the tricks used by ticket scalpers to scoop up tickets to events before fans can, and then resell them at a huge profit.
The problem has been ongoing, so much so that Congress is currently advancing the Ticket Act, legislation that will prohibit speculative ticketing and so-called “junk fees” concealed within ticket prices.
Massive Profits
On October 15, the U.S. Department of Justice — in conjunction with the Federal Trade Commission (FTC)— issued a press release announcing a major step in combatting ticket scalping by filing a complaint against REPS & Company Inc., a California corporation that allegedly spent in excess of a billion dollars to purchase more than 18.5 million tickets for resale.
Per the complaint, REPS and three of its executives — identified as Ryan Pancheri, Brian Archibald and Nicholas Totagrande — are accused of violating the FTC Act and the Better Online Ticket Sales (BOTS) Act, “prohibiting circumventing the measures Internet ticket sellers use to ensure equitable consumer access to event tickets.”
“The Justice Department is committed to holding accountable individuals and businesses that drive up the cost of event tickets by illegally exceeding ticket purchase limits and reselling those unlawfully obtained tickets with exorbitant markups,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. “Working alongside the FTC, we will continue to enforce the BOTS Act to protect consumers from such conduct.”
$120M in Profit Generated
The complaint was filed in the U.S. District Court for the Southern District of California.
In the complaint, the FTC alleges that the defendants had “routinely circumvented ticket issuers’ controls to purchase tickets in excess of purchase limits for thousands of events,” in an ongoing scheme dating back to 2022. The complaint continues by alleging the defendants subsequently resold those tickets on the secondary market. “Defendants spent more than $1.3 billion to amass over 18.5 million tickets for these events and generated at least $120.8 million in profit,” reads the complaint, which also states that “claims made in the complaint are allegations only, and there has been no determination of liability.”
A Large-Scale Operation
A video posted on YouTube by trustee laid out how the scheme worked, and how the company raked in such a huge profit on a massive scale.
Per the complaint, REPS is accused of using multiple employees — most of whom are based in the Philippines — to circumvent Ticketmaster security. Those employees controlled thousands of accounts created with names, addresses or phone numbers that belonged to other people, in addition to virtual credit cards and phone numbers that were held by REPS. Those employees are also accused of used IP proxy services and multi-session browsers in order to conceal their identity and location.
Whenever REPS employees were blocked, or had their purchases canceled, REPS enacted small adjustments to an account holder’s name or address, with the complaint also alleging that the company’s internal documents demonstrate that REPS officials discussed strategies to keep their accounts from becoming blocked.
In one example cited in the complaint, REPS used 1,300 different accounts to buy 7,624 tickets to one Beyoncé Renaissance tour show in Kansas City, Missouri, in 2023. Reselling those tickets, the complaint alleges, generated a staggering $833,000 in profit from that single concert.
Ticket Broker Accused of Buying 18.5 Million Tickets in FTC Complaint