Cunninghams Solicitors

A landmark verdict on ticket tout fraud

A recent landmark verdict could have significant ramifications for the practice of ticket touting. The verdict came in response to an appeal from two ticket touts- Peter Hunter and David Smith- who were appealing against their February 2020 conviction.

Peter Hunter and David Smith made at least £11m by using websites such as StubHub and Viagogo to sell seats at gigs by multiple artists. In February 2020 the duo were prosecuted by National Trading Standards, after a 2016 investigation by the Observer exposed the practices they had used to acquire the tickets fraudulently before selling them on at vastly inflated prices. The pair were convicted on multiple accounts of fraud: the first successful prosecution against a company fraudulently reselling tickets on a large scale.

National Trading Standards found that Hunter and Smith had used “dishonest and fraudulent tactics” to purchase multiple tickets from primary ticket sellers such as Ticketmaster and AXS. This meant that genuine fans were missing out on being able to buy tickets, while Hunter and Smith’s company, BZZ Limited, listed those tickets for sale to consumers at inflated prices.

In 2017, the defendants purchased more than 750 Ed Sheeran tickets and sold them at inflated prices, despite knowing customers might be refused entry because the singer had banned resold tickets.

Primary ticket sellers such as Ticketmaster use automated systems designed to block multiple purchases, but Hunter and Smith circumvented these systems, breaching the ticket sellers’ terms and conditions. The defendants used the personal details of other people they knew to buy the tickets, and deployed at least 97 different names, 88 postal addresses and more than 290 email addresses. Hunter and Smith also utilised automated computer programs (“bots”) to facilitate bulk purchases. The duo used nearly 300 email addresses, the emails to which were all auto-forwarded to one email address held by BZZ Limited. They also used multiple concealed IP addresses. 

The defendants also engaged in a fraudulent trading practice known as “spec” selling, whereby tickets are listed for sale on secondary ticketing websites even though these tickets have not yet been purchased by the seller. This means that consumers are buying non-existent tickets at an inflated price. Once the sales were secured, the defendants would try to source the tickets to fulfil the purchase, but of course there was always the risk that BZZ Limited would be unable to supply the ticket, meaning that the consumer would be left out of pocket.

Hunter and Smith appealed their convictions on all counts, based on a number of grounds about the judge’s rulings. The Court of Appeal rejected these appeals and stated that it is “clear that the convictions were entirely safe”. It also noted that Hunter and Smith never “made clear to consumers the risk attaching to the purchase of a ticket, namely that consumers were acquiring at inflated prices tickets that the event organiser might treat as null and void. Had this been transparent then it can properly be inferred that purchasers might have been reluctant to spend large sums on tickets that might turn out not to permit entry to the event in question. This lack of transparency is unlawful.”

What does this verdict mean for ticket touts?

The verdict could have a major impact on the “secondary ticketing” industry, which is dominated by professional touts who deploy a variety of techniques to harvest tickets in large numbers and sell them at hugely inflated prices. The court noted that the “ticketing market is one which appears to be characterised by a high degree of criminal fraud.”

Wendy Martin, programme director of National Trading Standards, said the ruling was a “major milestone in the efforts to tackle the dishonest and fraudulent practices in the secondary ticketing market. Consumers continue to be at a disadvantage when trying to spend their hard-earned money on tickets for music concerts and sporting events and we hope our work to test the current legislation and make recommendations to government will make it easier and safer for consumers buying tickets in the future.”

In the wake of the verdict, statements from ticket sellers implied that the industry would be ramping up vigilance when it came to ticket tout fraud, with a spokesperson for ticket seller Viagogo saying: “We are pushing for increased industry-wide collaboration to facilitate information-sharing, allowing all platforms to target suspicious activity and act swiftly to remove any rare cases of fraudulent selling.”

Adam Webb of anti-ticket touting campaigner FanFair Alliance said, “This precedent-setting judgement will be a bitter blow for Hunter and Smith. But there will also be far-reaching ramifications for other touts, many of whom use similarly unlawful business methods to acquire tickets, and for websites like Viagogo and StubHub who depend on these suppliers for the bulk of their listings. All in all, it’s a good day for music fans, and another nail in the coffin for those who profit from, support and invest in these deeply unethical practices.”

What to do if you are accused of ticket tout fraud

If you are being investigated or have been charged with ticket tout fraud or fraudulent trading, it is important not to delay in speaking to a fraud defence solicitor.

Cunninghams are a criminal defence practice who specialise in the defence of allegations of serious fraud. Cunningham’s fraud solicitors are used to dealing with enquiries from people who wish to transfer their case to them from another solicitor. We are used to dealing with such enquiries and can reassure clients that any transfer of their case will be smooth, free of embarrassment and always in their best interests.

Operating nationwide from bases in the City of London and central Manchester, Cunninghams are leaders in defending those accused of serious fraud and complex crime and are consistently ranked as a leading practice in these fields in all guides to the UK legal profession. Specialising in this work for over 30 years has resulted in an enviable network of experts, forensic accountants, QC’s and senior barristers to ensure our clients benefit from the best defence team.

If you are being investigated or have been charged with money ticket tout fraud, contact Cunninghams to receive immediate expert advice from an experienced fraud defence solicitors