StubHub is facing a class-action lawsuit after making a U-turn on its refund policy amid the Covid-19 shutdown of live events.
Ticket-buyer Matthew McMillan submitted the complaint to the U.S. District Court for the Western District of Wisconsin, stating StubHub “sought to surreptitiously shift their losses onto their innocent customers.”
Earlier this month, the US-headquartered ticketing firm assured its customers that refunds would be honoured in the event of a cancellation as the Covid-19 crisis began to pick up pace. StubHub president Sukhinder Singh Cassidy told fans that its FanProtect Guarantee would remain in place to refund all tickets purchased on the site in the event of cancellation.
Now, the policy states: “When an event is cancelled, you will receive a StubHub coupon worth 120% of your original order.”
The lawsuit, which has been filed on behalf of McMillan and others similarly situated to him, claims the policy change amounts to a breach of contract, conversion, negligent misrepresentation, a violation of California’s consumer protection law, unfair business practices and false advertising.
It points to StubHub’s longstanding ‘FanProtect’ guarantee that ensured fans would receive a cash refund, stating that “a major component of StubHub’s value is that refunds would be available.”
The suit reads: “[StubHub] has quietly sought to force their buyers to endure the financial losses that [their] own guarantee created in the entirely foreseeable scenario that world occurrences would cause the simultaneous cancellation of numerous public events.”
StubHub’s practice of paying ticket sellers before an event took place was also called into question by the lawsuit, as it said the move exposed them to the possibility that they would be “left holding the bag” if an event was cancelled and they could not promptly collect from sellers.
The filing also reintroduces a quote that StubHub vice president and general counsel Stephanie Burns provided before the House of Representatives in February: “StubHub’s FanProtect guarantee is the hallmark of our business and why we have earned the trust of fans around the globe.”
Following the announcement of the refund policy change, a StubHub spokesperson told TheTicketingBusiness: “As a marketplace, we act as an intermediary for buyers and sellers. In normal times, we’ve made the decision to refund buyers before collecting money from the seller to offer buyers more convenience. And under normal circumstances, this works well, even with StubHub taking the risk of timing delays and some losses when we are unable to collect from the seller.
“With the coronavirus impacting 28,000+ events and the associated magnitude of challenge in recouping monies owed by sellers over the coming months, it is currently impossible for us to offer immediate cash refunds to all buyers.”
StubHub – which is in the process of being acquired by Viagogo – last month also changed its payout processes to withhold funds until after an event has taken place. The move has meant brokers are not granted access to the revenue from a ticket sale as quickly.