More than $20 million paid in consumer restitution 

August 25, 2024 – OAKLAND, CA – California Attorney General Rob Bonta on Thursday announced filing a complaint and stipulated judgment resolving the investigation into ticket reseller StubHub, Inc. (StubHub) for failing to timely pay refunds to California consumers for canceled events during the COVID-19 pandemic. At the onset of the pandemic, StubHub failed to honor its advertised policy of providing full cash refunds for canceled events and instead issued consumers StubHub credit for future events. Following an investigation by the California Department of Justice, StubHub reversed its decision in May 2021 and began providing cash refunds to California consumers. The settlement, which was approved on Friday in Los Angeles Superior Court, includes strong injunctive terms for future StubHub ticket sales, a penalty of $295,000, and memorializes $20 million in cash refunds that StubHub provided to more than 45,000 California consumers following the commencement of this investigation.

“By failing to issue full cash refunds for canceled events during the pandemic, StubHub not only violated its advertised policy but also violated the trust of its consumers,” said Attorney General Bonta. “My office proudly works to keep California consumers safe from false or misleading business practices. If you believe you are the victim of false or misleading advertising, please report it to oag.ca.gov/report.”

StubHub operates one of the largest online ticket reselling marketplaces, where buyers purchase tickets to concerts, sports, and other events. StubHub had long advertised that consumers would receive full refunds for tickets purchased on its website or app if the event were later canceled. StubHub made this “FanProtect Guarantee” a central part of its marketing efforts. But in late March 2020, as mass events were canceled in response to COVID-19, StubHub announced a policy change in which consumers would instead receive 120% credit for future StubHub purchases, rather than a full refund for canceled events. This new policy was applied to new ticket purchases and to consumers who had already purchased tickets based on the prior FanProtect Guarantee.

The complaint alleges StubHub violated California’s Unfair Competition Law (UCL) and California’s False Advertising Law by misleading ticket buyers who relied on the advertised refund policy when purchasing tickets before March 2020.

In addition to $20 million in consumer restitution and a $295,000 penalty under the UCL, StubHub will have to comply with significant injunctive terms requiring StubHub to abide by the UCL and other consumer protection laws, including not violating California laws specific to event ticket sales. The negotiated terms also specifically prohibit StubHub from making any misrepresentations regarding its refund policies or failing to honor the existing refund policy unless it is modified by agreement with the informed consent of the consumer.

California law imposes several obligations on ticket sellers, including with respect to canceled or rescheduled events.  As of January 1, 2022, ticket sellers must provide a full refund for any canceled event within 30 calendar days of the cancellation. For events that are postponed, rescheduled, or replaced with another event at the same time and place, a consumer is entitled to a full refund upon request, which must be provided by the ticket seller within 30 calendar days of the request.

Attorney General Bonta is committed to investigating and remedying harm to consumers affected by unlawful and deceptive business practices. 

• In July, Attorney General Bonta issued information for consumers following Senate Bill 478 (SB 478) going into effect on July 1, 2024. SB 478 makes it illegal for businesses to advertise or list a price for a good or service that does not include all required fees or charges other than certain government taxes and shipping costs. 
• In May, Attorney General Bonta, alongside a multistate coalition, announced a $10.25 million settlement with major U.S wireless carriers after an industry-wide investigation of misleading advertising practices. The settlement requires industry-wide changes to deceptive advertising practices in the marketing of cell phones.
• In April, Attorney General Bonta, along with the District Attorneys of Alameda and Marin counties, and city and county of San Francisco, announced a $23 million settlement with Service Corporation International, the nation’s largest funeral service provider for engaging in false advertising and unlawful and deceptive acts in its marketing and sale of pre-need cremation packages.
• Also in April, Attorney General Bonta submitted a comment letter supporting the Consumer Financial Protection Bureau’s proposed rule which would close a regulatory loophole that enables banks to extract billions of dollars from consumers by charging overdraft fees without adequately disclosing basic credit terms.

A copy of the complaint and stipulated judgment can be found here, and here.

Source: CA DOJ