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‘Major milestone’: ticket touts lose fraud conviction appeal

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Two ticket touts who made at least £11m by using websites such as StubHub and Viagogo to sell seats at gigs by artists including Ed Sheeran have had their appeals against a conviction for multiple counts of fraud dismissed.

In a landmark verdict that could have significant ramifications for the practice of ticket touting, the court of appeal rejected the appeals of Peter Hunter and David Smith against their February 2020 conviction.

The duo were prosecuted by National Trading Standards, after a 2016 investigation by the Observer exposed the practices they had used to fleece fans.

NTS found Hunter and Smith had used “dishonest and fraudulent tactics” to purchase multiple tickets from primary ticket sellers such as Ticketmaster, Eventim and AXS.

This meant that their company, BZZ Limited, was elbowing out genuine fans trying to buy tickets, then listing those tickets for sale to consumers at inflated prices.

The court of appeal noted that their convictions, on multiple counts of fraud, were “entirely safe”, adding that the ticket resale market was “one which appears to be characterised by a high degree of criminal fraud”.

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 massively inflated prices.

The tactics used by Hunter and Smith to mop up tickets circumvented automated systems designed to block multiple purchases and breached legitimate ticket sellers’ terms and conditions.

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

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To evade measures designed to stop touts by limiting individual purchases, Hunter and Smith used the personal details of other people they knew to buy the tickets. They deployed at least 97 different names, 88 postal addresses and more than 290 email addresses, as well as deploying automated computer programs known as “bots” to facilitate bulk purchases.

Emails to nearly 300 email addresses they used were all auto-forwarded to one email address held by BZZ Limited, while they used multiple concealed IP addresses to disguise bulk buying.

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The defendants also engaged in fraudulent trading by listing tickets for sale on secondary ticketing websites that they had not purchased and did not own.

Known as speculative of “spec” selling, the tactic involves inducing consumers to buy non-existent tickets at an inflated price. Once the sales were secured, the defendants would try to source the tickets to fulfil the purchase.

Consumers were therefore tricked into paying an inflated price and also exposed to the risk that BZZ Limited would be unable or unwilling to supply the ticket.

The court of appeal noted that in one case a secondary ticketing website had helped Hunter and Smith by providing them with a barcode scanner so that they could generate barcodes used for the resale of digital tickets.

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.

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“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.”

StubHub were contacted for comment. Viagogo said the company had “never approved of using bots to gain an unfair advantage when buying tickets”. A spokesperson said: “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.”