Secondary ticketing fraud appeal rejected in court
The Court of Appeal has today (26 November 2021) dismissed appeals from two online ‘ticket touts’ who were jailed on 24 February 2020 in a landmark case heard at Leeds Crown Court.
Peter Hunter and David Thomas Smith, ran BZZ Limited, a multi-million pound limited company through which they purchased and resold hundreds of tickets at inflated prices for events and concerts such as Ed Sheeran, Harry Potter and the Cursed Child (the play), Madness, McBusted and many other mainstream acts. Their prosecution in February 2020 marked the first successful prosecution against a company fraudulently reselling tickets on a large scale.
Mr Hunter and Mr 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’. The Court of Appeal also noted that Mr Hunter and Mr 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.’
The broader characteristics of the secondary ticketing market was also highlighted by the court, which noted that the ‘ticketing market is one which appears to be characterised by a high degree of criminal fraud.’
Wendy Martin, Director, National Trading Standards, said:
“We welcome today’s ruling by the Court of Appeal, which represents another 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.”
Cllr Derek Bastiman, North Yorkshire County Council’s Executive Member for Trading Standards, said: “I can't stress enough how important this judgment is for UK consumers, or how hard the National Trading Standards eCrime Team has worked to bring it about.
“We have now seen this team, originally conceived and backed by North Yorkshire County Council, change the consumer landscape, not just once in the copycat website case, but twice with its ground-breaking legal work on secondary ticketing."
Councillor Andrew Waller, executive member with responsibility for Trading Standards at City of York Council, said:
“I applaud our expert investigators for unveiling and successfully prosecuting this secondary ticketing scam which has lined the pockets of BZZ Limited while costing genuine fans and consumers dear.
“The investigators’ tenacity and this sentence has exposed the fraudulent practices in the secondary ticketing market, and that those who commit such crimes will face the consequences.
“If you believe you have fallen victim to similar websites, please contact Trading Standards via the Citizens Advice Consumer Helpline on 0808 223 1133.”
Background to the case
An investigation by National Trading Standards found that Mr Hunter and Mr Smith used several dishonest and fraudulent tactics to purchase multiple tickets from primary ticket sellers such as Ticketmaster, Eventim and AXS. This meant that BZZ Limited was dishonestly and fraudulently competing with consumers to purchase tickets from the websites of primary sellers while, at the same time, listing those tickets for sale to consumers at inflated prices.
Furthermore, the company’s tactics circumvented the platforms’ terms and conditions and their automated systems to block multiple purchases. This saw them purchase more than 750 Ed Sheeran tickets in 2017. Despite knowing that their purchases had contravened the primary sellers’ terms and conditions – making tickets liable to be cancelled – the defendants knowingly continued to resell hundreds of tickets to consumers at inflated prices.
To evade the platforms’ systems, the defendants:
- Used a number of different people to buy tickets
- Applied other people’s personal details to purchase tickets
- Deployed at least 97 different names, 88 postal addresses and more than 290 email addresses to evade platform restrictions. These identities were enhanced through the use of bots, which are designed to support the automated bulk-buying of tickets. Emails to the 290+ email addresses were all auto-forwarded to one email address held by BZZ Limited
- Used different IP addresses and concealed their IP address – their internet identity – to disguise bulk buying.
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 ‘spec selling’, the idea was to induce consumers to agree to ‘buy’ non-existent tickets at an inflated price. Once sales had been 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.