Policies and Legislation

The Past, Present and Future

As part of the Ticketing Institute Pop-up in Bristol ahead of the AMA conference, I was asked to deliver a look back, an assessment of where we are and projection of where we are headed in ticketing the Arts.

A large number of the audience have asked for a slide set, so here they are.

It is important to remember, that this is a technological as well as human journey or progression and ultimately the successful advancement of our ticketing and marketing effort will be driven by both of these, but more important by the processes and mentality we adopt as an organisation.

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Friday 13th bad day for ticket sales practices?

They have been coming for some time, but Friday 13th June 2014 saw arriving into UK law the European Union Consumer Contracts (Information, Cancellation and Additional Payments) Regulations 2013. Europe-wide these fundamentally ban hidden fees and charges – no more drip pricing – and pre-ticked check-boxes on websites. Perhaps the more surprising one for some ticket offices will be the ban on premium rate numbers and lines which pay part of the call cost back to the seller – consumers must now be able to call directly on local rate phone lines where they only pay the basic rate.

It may seem sad that many of these practices are part of the desperation on the part of venues to increase retained income as on-line sales have soared, and there have been a steady series of consumer protection measures to deal with the multiple ways customers are charged or additionally opted-in without their obvious consent.

The UK Government hurriedly introduced regulations banning specifically named card charges for paying by debit and credit card in April 2013, if these charges were for more than the actual cost of processing. Now the legilsative push is for no hidden charges, so customers can see the full price they will pay before they start the purchase process.

Inclusive pricing is starting to be a practice adopted internationally – StubHub and Live Nation have done so in the US – and @WhichCampaigns in the UK are continuing their action against agencies like Ticketmaster and See for charging excessively and having multiple charges including for ‘Print-at-Home’. Ironically, Ticketmaster is in the final stages in a long running Court battle in the US to compensate 50 million customers for order processing and convenience fees which were simply profit centres, despite being referred to as, for example, UPS “delivery charges”.

This also means practices must change for options such as adding ticket insurance to transactions – no more pre-ticked boxes – and Round-Up donations must be an Opt-In. UK venues which had already changed their presentation of web donations at the end of ticketing transactions had in fact seen some increase in consent and the value of donations after providing explanataory information.

Some ticket re-sellers may find themselves caught by the detail: Retailers will be required to provide certain prescribed information to a consumer before the consumer can be bound. Such information will include in particular: (i) the main characteristics of the goods; (ii) the identity of the trader; (iii) the total price of the goods/services (inclusive of taxes); and (iv) all additional delivery charges and any other costs. This seems potentially likely to inhibit some secondary market practices.

It is also less clear how some of the new requirements for extended “cooling off” periods and for refunds will apply to ticket purchases made on-line. But one thing is clear: Consumer Protection regulations are steadily impacting on ticketing, joining action in the UK by the Advertising Standards Authority in a drive to inclusive pricing and the removal of excessive charges around ticket purchases.

UK Parliamentary Group recommends action on Ticket Abuse

The UK All Party Parliamentary Group on Ticket Abuse has completed its enquiry into ticket touting and the secondary market.  Its’ report published on 25 April 2014 recommends Government action to safeguard ticket purchasers, and proposes new clauses to go into the Consumer Rights Bill coming up in Parliament in May 2014.  Recommendations include:

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No Golden Hello, but great Goodbye

All customers are special, how we recognise and communicate this is dependent on our staff dealing with them.

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Venues cannot rely on Cloud Service Providers PCI DSS compliance

The PCI Security Standards Council has ruled in a new 52 page guidance note (25 February 2013) that venues cannot rely on the fact that their “Cloud Service Provider” (CSP) is compliant in order to be PCI DSS compliant themselves.

Some advisers have been pointing this out for some time, and recommending that venues seek full PCI DSS compliance themselves, but generally venues have accepted the statements of their providers as to their compliance.  Now there is a clear ruling, which extends the venue’s responsibility to check on what the CSP is doing to protect their customer data:

“Use of a PCI DSS compliant CSP does not result in PCI DSS compliance for the clients,” the Council said. “The client must still ensure they are using the service in a compliant manner, and is also ultimately responsible for the security of their [cardholder data] – outsourcing daily management of a subset of PCI DSS requirements does not remove the client’s responsibility to ensure [cardholder data] is properly secured and that PCI DSS controls are met.”
“The client therefore must work with the CSP to ensure that evidence is provided to verify that PCI DSS controls are maintained on an ongoing basis—an Attestation of Compliance (AOC) reflects a single point in time only; compliance requires ongoing monitoring and validation that controls are in place and working effectively. Even where a cloud service is validated for certain PCI DSS requirements, this validation does not automatically transfer to the client environments within that cloud service,” it said.
The PCI Security Standard Council, which comprises major payment card brands including American Express, Visa and MasterCard, said that CSPs should be able to provide their clients with proof that they have been validated as being PCI DSS compliant. This evidence should include “proof of compliance documentation ..; documented evidence of system components and services that were included in the PCI DSS assessment; documented evidence of system components and services that were excluded from the PCI DSS assessment, as applicable to the service; appropriate contract language, if applicable,” it said.
Businesses should also go through a “thorough due-diligence process” to assess CSPs’ security offerings, it said.  “Due diligence is not simply reading the provider’s marketing material or relying on a provider’s claims of ‘PCI compliance’ or secure operations,” the guidance said.  “Clients should be sufficiently assured that they are engaging with a provider that can meet their security and operational needs before undertaking any such engagements.”
The Council said that businesses and their CSPs need to divide responsibilities for payment card security between them. It said that the sharing of those responsibilities will differ depending on whether organisations are using a private, public, community or hybrid cloud model.  The Council said that even if CSPs are responsible for “managing security controls”, the business clients would still be responsible for “ensuring that their cardholder data is properly secured”.
The guidance note linked to above gives details of the 12 compliance conditions and how venues and CSPs should manage their responsibility.
“As a general rule, the more aspects of a client’s operations that the CSP manages, the more responsibility the CSP has for maintaining PCI DSS controls,” it said. “However, outsourcing maintenance of controls is not the same as outsourcing responsibility for the data overall. Cloud customers should not make assumptions about any service, and should clearly spell out in contracts, memorandums of understanding, and/or SLAs (service level agreements) exactly which party is responsible for securing which system components and processes.”
The SLAs should “clearly identify the delineation of responsibilities between parties, including responsibilities for implementing and managing different security controls” and “should be established as a prerequisite to any cloud service implementation”, it added.The Council’s guidance sets out each of the 12 PCI DSS principles and provides a hypothetical example of how responsibility for compliance with each of them could be divided up or shared between a CSP and a business.
The Information Commissioner is also concerned about the security and privacy of customer data stored in the Cloud on shared systems, mainly because of software bugs and glitches which have revealed customer data to the wrong users.  CSPs can certainly meet the required standards, but it is now confirmed that users (venues) must audit and validate that these are being maintained on their behalf.

Advertising ticket prices the right way

What price that ticket?  Are we making sure we are advertising ticket prices to comply with UK law and codes of advertising practice?

The Theatrical Management Association has issued new guidance to its members in the UK on the advertising of ticket prices.  Essentially, ticket prices when advertised must be inclusive of the booking fees and service charges imposed on the purchase.  Advertising, in a common misunderstanding, extends to a venue or producer’s own print and posters, websites, social media and other distributed information and not just paid-for advertising.

The TMA has acted after the Ambassadors Theatre Group chain of theatres, the Old Vic in London and the Cheltenham Everyman Theatre were approached by the Advertising Standards Authority (ASA) and the Committee on Advertising Practice (CAP) following on many public complaints about imposed booking fees which cannot be avoided.  There is considerable argument about the right way to present this, but Jonathan Brown of S.T.A.R. confirms “If you advertise a ticket price, you have to be able to buy it for that price, somewhere”.

The CAP and the Office of Fair Trading (OFT) have published guidance and interpretations in relation to ticket prices and purchase Terms and Conditions, which have largely been ignored by many venues, since December 2001!  These codes of practice supplement the law and the new ASA rulings are intended to set a benchmark for all adertising of tickets through all media across the ticketing sector.

In common with many other venues, it is easy to find examples: the Cambridge Arts Theatre advertises the ticket prices for performances, but imposes a booking fee of £2 per ticket on top of the advertised price, which has to be paid through all purchase channels.  The CAP guidance is clear – the ticket prices are in fact £2 higher and must be advertised as such.  Correctly, the current Michael Grandage Season in London’s West End advertises ticket prices inclusive of their booking fees, and only in the shopping cart are the ticket price and booking fee amounts revealed separately.  ASA found that in some cases the actual total purchase price of tickets was 30% above the advertised ticket price, once all fees and charges were included, and this is ruled as unfair advertising.

This is fairly simple: you cannot advertise something using a price to attract attention and then for consumers not to be able to buy it for that price.  Debbie Richards of Baker Richards points out that this will require detailed presentational changes for venues that have chosen ‘per transaction’ fees and charge different fees for different channels, but it will still be possible to comply if the information is given whenever prices are quoted.

Essential links:

CAP code: http://www.cap.org.uk/Advice-Training-on-the-rules/Advice-Online-Database/Ticket-Pricing.aspx

Help Note: http://www.cap.org.uk/Advice-Training-on-the-rules/Help-Notes/Ticket-pricing.aspx

The arts and entertainment industry needs a fair and healthy relationship with its customers, especially in a time of cuts to funding.  Many venues, especially presenting theatres and concert halls, are introducing or increasing booking fees, which in a recession may itself upset some customers.  Advertising the new “prices” in the right way is essential.  There is an irony here: according to the OFT, consumers prefer inclusive prices, so advertising inclusive prices is likely to be viewed by ticket purchasers as a benefit.

In a similar way to the airlines, the various regulations and rulings now require that most charges are included in the advertised price, presented from the start of any advertising or on-line purchase process, and never added only at the shopping cart stage of an on-line purchase.  While explaining the fees and charges up front is good practice, the advertised price has to be comprehensive of fees and charges if that is what the purchaser has to pay.

Of course this might be thought bad news by some ticketing system suppliers.  In the competition in an over-crowded marketplace, it appears that some sales teams’ approaches to venues are using the venue’s current vulnerability to argue for pay-as-you-go charges which “can be easily recovered from customers in the booking fees”.  Venues need to do the arithmetic and recognise that fees cannot be a hidden surprise to the ticket purchaser at the end of a transaction.

Met. Police Report demands legislation on Ticket Crime

When the Metropolitan Police in London demand legislation to combat ticket crime, it is time to take notice.  Operation Podium, set-up to combat ticket fraud for the London 2012 Olympics, is closing down.  Their report – Ticket Crime: Problem Profile February 2013 – published on 19 February 2013 makes for disturbing reading.  It identifies that ticket fraud in the UK alone makes £40 million per annum for the criminals behind the scams.

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Legal challenge to UK secondary ticket market

The UK Supreme Court has ruled that secondary market ticket sellers must hand over to the primary seller the names of people who have breached the primary sellers’ Terms and Conditions by re-selling their tickets at inflated prices on secondary market sites.  The UK Rugby Football Union won its case against Viagogo (now a Swiss company) to reveal the names of people who re-sold seats they had booked for its’ 2010 Internationals and the Six Nations Championship in 2011.  The Supreme Court judgement on 21 November after the appeal on 14 June 2012 was in fact against Consolidated Information Systems Limited, the former UK firm known as Viagogo Limited, now in liquidation.

The Rugby Football Union (RFU) stance is clear: there were supporters who wanted to buy tickets, and the RFU had set affordable prices, and they did not want those tickets sold at vastly inflated prices, but sold to their supporters at the set prices.  The RFU plans to use the names handed over by Viagogo to “name and shame” the re-sellers and may take further Court action against individuals to recover the money.

While Viagogo says only a a handful of names is involved, the RFU says thousands of tickets were sold on the Viagogo website in breach of their Terms and Conditions.  The RFU says “appropriate sanctions will be handed down” including clubs and individuals having their seat allocations suspended or revoked, being named and shamed, or prosecuted to force them to return the profits they made from their tickets.  The Judge in the case being appealed by Viagogo had also held that those who entered the stadium by use of a ticket obtained in contravention of RFU conditions were arguably guilty of trespass.

The RFU is one of the few UK sporting bodies to take direct action over re-sellers who breach the Terms and Conditions of ticket purchase.  Their ticket purchase procedures could not make the Terms and Conditions of purchase clearer.  The Wimbledon Lawn Tennis Association, using their Terms and Conditions, in the past has simply cancelled as void any tickets advertised for sale on e-Bay or other secondary market sites.  The Supreme Court ruling confirms the legal contract status of the Terms and Conditions of purchase and that purchasers are bound by these if they choose to buy the tickets.

Perhaps reflecting their attitude to the law, The Guardian reported Viagogo spokesman Ed Parkinson saying “the resale of rugby tickets is still legal.  Our data protection is now better, so fans may therefore now buy and sell rugby tickets on Viagogo with confidence that their information will be protected”. In fact the Data Protection Act in the UK does not protect identity in the case of legal proceedings, and the Supreme Court ruled that revelation was proportionate under article 8 of the European Union Charter of Fundamental Rights, so it is hard to see how Viagogo intends to evade the Supreme Court ruling.  The Guardian reported that Viagogo was continuing to sell tickets at inflated prices for the England versus South Africa game at Twickenham, prices inflated up to £599.

The UK’s Channel 4 investigative TV programme Dispatches revealed in February 2012 that despite the descriptions on their websites, fewer than 25% of the tickets sold on secondary market sites come from fans trying to re-sell tickets.  Most come from allocations from the promoters, from “power-sellers”, from ticket brokers, and from staff making direct purchases from the likes of Ticketmaster.  If they could not get enough tickets by those means, whenever necessary the companies were buying the tickets themselves, impersonating the public, using numerous credit cards registered at the home addresses of staff.  If Viagogo says only a handful of names of fans are involved, the other sources could be pursued by the RFU.

Viagogo moved from the UK to be a Swiss company, closing down their UK company, at the time of the investigation into their re-selling practices, when Dispatches’ under-cover reporters filmed their training of staff and advice to refrain from explaining the source of their tickets or even the seat locations.  In Portsmough, the Police are also investigating the sale of fake tickets by Viagogo for a Mumford and Sons gig at Portsmouth Guildhall.  The BBC reported hundreds of fans, some who had travelled from the US, had paid inflated prices for £23.50 face value tickets which turned out to be fakes and were refused on the door on Thursday 22nd November.  Viagogo spokesman Ed Parkinson told the BBC that a handful of people had so far complained, and he promised a full refund.

Read the UK Supreme Court Judgement here: http://www.supremecourt.gov.uk/decided-cases/docs/UKSC_2012_0030_Judgment.pdf

No more profit on card charges

UK Consumer Affairs Minister Norman Lamb has announced a consultation on Government plans to ban above cost charges for payments by credit and debit cards.

Norman Lamb said,
“We want consumers to be able to pay for their goods and services without being hit by excessive hidden charges. That is why we are consulting on limiting the fees that traders can charge to consumers for using particular methods of payment. It can often be frustrating when purchasing a product or a service online, to find out only towards the end of the transaction that the final price is much higher due to things like payment surcharges. These proposals will stop companies from adding on these excessive charges, and allow consumers to see a clearer and more transparent breakdown of what they are paying for. 

“These proposals are a welcome and important step for consumer empowerment, not just in the UK but across the EU. They form part of a wider strategy to simplify, strengthen and modernise consumer and competition frameworks.

This will bring part of the European Union’s Consumer Rights Directive into force in the UK. Traders will no longer be able to make a profit by charging the consumer for credit or debit card use, above the amount it costs them to process that payment.  Many arts and entertainment organisations charge card processing fees above cost, and these charges are only advised to the customer at the point of payment.  Some ticket agents charge multiple fees.  These practices will be banned.

It is anticipated that the legislation could be in force by January 2013.  This follows on from the “super-complaint” by consumer group Which? that customers were being ripped-off by card charges, at the end of the purchase process, which bore no relation to the true cost of processing their payment.  In December 2011, in response to recommendations from the Office of Fair Trading (OFT), the Government announced plans to stop businesses from charging consumers excessive payment surcharges.

The planned legislation will complement enforcement and compliance work by the OFT to ensure that add-on charges generally are transparent and consumers are able to compare prices more effectively, especially for purchases such as flights, where airlines have responded by substituting “administration charges” declared at the start of the purchase process.

The intention of the ban is to ensures that consumers are aware of the level of costs they are committing to and that traders who treat consumers fairly are not disadvantaged by those who use less transparent practices to lure consumers towards less competitive offers.  Some arts and entertainment venues have never made surcharges for card processing.

There will be an interesting side-effect since many venue deals with touring theatre companies include a standardised card settlement charge which is usually above the actual rate paid – this ought now to reflect the true cost. Like the payment charges themselves, these have been “back-door” methods of increasing the income retained by venues.  For many venue managers, the closing off of these additional income channels will force them to challenge producers on the fundamentals of their financial equation.

Details of the consultations are on  www.bis.gov.uk/consultations from 3 September 2012

Fans First: Standing up against secondary markets

Venues, artists, producers and promoters in the US are getting behind an initiative to protect against what we might call ‘legitimised scalping’.  

The Fans First coalition started in May 2011 is an effort to change and improve the ticket experience for fans – of sports, arts and entertainment – by fighting for access to reasonably priced tickets and enhanced protection against fradulent business practices.  The definition of “fraudulent” is open to question, but stems from the shocked reaction by venues and primary ticket sellers to attempts from the secondary market to lobby for legislation in individual US states to enable fans to ignore the terms and conditions of ticket purchase and re-sell tickets through StubHub and the like without limit on the resale price in relation to the face value.

There is no avoiding the fact that secondary markets simply take money out of the sports, arts, and entertainment industry and put nothing back.  That is capitalism and free markets for you.  But over 150 organisations in the US are backing Fans First and their website: http://www.standwithfans.org/  The website asks ticket purchasers to report scams they discover and to back the concept of near face value ticketing.  The concept of the campaign is simple: if the producer, promoter or venue manager has set an affordable price, even if the event is selling out, why should you pay more, when you are simply being ripped off by the re-seller, who won’t pay any more for the ticket?

Already, over 150 venues, artists, producers and promoters in the US are getting behind Fans First, an initiative to protect against what we might call ‘legitimised scalping’.

Started in May 2011, the Fans First coalition is an effort to change and improve the ticket experience for fans – the ticket purchasers for sports, arts and entertainment events – by fighting for access to reasonably priced tickets and enhanced protection against fradulent business practices.  Their definition of “fraudulent” is open to question, but stems from the shocked reaction by venues and primary ticket sellers to attempts from the secondary market to lobby for legislation in individual US states to enable fans to ignore the terms and conditions of ticket purchase and re-sell tickets through StubHub and the like without limit on the resale price in relation to the face value.  Ironically, cutting-edge developments such as ‘paperless ticketing’, including tickets on mobiles, and Will Call (Collect from Box Office) Only ticketing have challenged the touts/scalpers who need access to physical tickets and ideally without the names of the ticket purchasers attached to the tickets.  Attempts in US state capitals to lobby so that re-sellers were not restricted by such state-of-the-art personalised developments actually represented a backwards step, undermining personalisation and engagement.

There is no avoiding the fact that secondary markets simply take money out of the sports, arts, and entertainment industry and put nothing back.  (Though Channel Four in the UK identified that some promoters had made deals with secondary market re-sellers to supply cheap seats for re-sale at high prices).  The exagerrated prices they charge are mostly not shared back to the producers and venues. That is capitalism and free markets for you.

But over 150 organisations in the US are backing Fans First and their website: http://www.standwithfans.org/  The website asks ticket purchasers to report scams they discover and to back the concept of near face value ticketing.  The concept is simple: if the producer, promoter or venue manager has set an affordable price, why should you pay more, when you are simply being ripped off by the re-seller?

“Online, it is nearly impossible to distinguish between a fan and a scalper. Scalpers, while not representative of the majority of ticket buyers, routinely attempt to purchase as many of the best seats as possible the second they go on sale (often using bot software) for the sole purpose of reselling them to make a profit. Fans deserve better.”

“Fans who innocently search for tickets online are routinely misled into purchasing tickets from websites that masquerade as being affiliated with artists, teams or venues. These phony, non-sanctioned sites trick fans into believing that they are buying tickets directly from the artist or venue rather than the resellers who operate them.”

“Many resale marketplaces and companies sell tickets they do not have in-hand, and do not disclose this fact to the ticket buyer. Fans are often unaware that the tickets they purchased are speculative in nature, and they may get left holding the bag — and therefore unable to see a game, concert or show — if the ticket seller cannot fulfill speculative orders, even after paying for their tickets.”

One of the major concerns of venues, producers and some promoters is that complaints from the public about ticketing practices have hugely increased and adverse coverage by the media has predominated – look at the coverage for the UK 2012 Olympics – creating an unhealthy environment in which customers don’t trust ticket sellers. Fans First Chairman Michael Marion of the Verizon Arena in Little Rock Arkansas has experienced the problems first hand and was interviewed for an article in the IAVM on-line magazine.

One of the ironies some people see is that Ticketmaster is backing Fans First, presumably with the interests of Live Nation behind a desire to re-build trust in ticket purchasers?