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Why consumers are the real losers in the Schlesinger v. Ticketmaster lawsuit settlement




Ticketmaster agreed to settle for $45 million in a class action lawsuit for allegedly overcharging on ticket fees.
Ticketmaster agreed to settle for $45 million in a class action lawsuit for allegedly overcharging on ticket fees.
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If you've ever bought a ticket via Ticketmaster, you've felt the sting of its surcharges — handling fees, shipping fees, "convenience fees" — which can easily add up to more than half of the ticket's face value. By the time you check out, that $40 ticket is more like $60. 

For more than a decade, a class action lawsuit against Ticketmaster over those fees worked its way through the courts. A settlement was reached early in 2015 in which Ticketmaster agreed to offer $383 million in discounts on future ticket purchases by parties to the class action suit. However, Ticketmaster could end up paying out no more than $45 million.

The ticket buyers who were party to the suit have recently begun receiving e-mail notices that spell out the agreement.

The Frame's John Horn spoke with Eric Reed, an attorney and contributor to the financial site The Street, who wrote “Ticketmaster Probably Owes You Money: Here’s How to Try to Get It" — about how customers are still getting the short end of the stick. 

INTERVIEW HIGHLIGHTS

I’m a big fan of Wilco and I want to see them in concert. So I go to Ticketmaster, buy my concert tickets but before I get them, I have to pay all these added charges. But none of those fees reflect Ticketmaster’s real costs, right?

The problem, and what the plaintiffs alleged, was that Ticketmaster represented these things as transaction fees that they themselves were paying when in fact it was set up as a profit center for the company. So they were telling you that you had to pay $5 to $10 for shipping, $5 to $10 for processing, when they're pocketing most if not all of that money. 

But like a lot of class action lawsuit settlements, there's a feeling among some people that the people who made out the best are the lawyers. What are the consumers gonna get? 

Not much. So this is a kind of settlement called a coupon settlement. The coupon settlement is this idea that instead of actually giving back a cash award, the customers are given a discount. What a lot of people feel like, and I agree with them, is that it's just stupid. I mean, why do I have to go back and shop in a place that I just said wronged me? Why do they get rewarded for wrongdoing with repeat business? 

The actual savings is just two bucks a ticket, is that right? 

$2.25. You can also be entitled to $5 off of shipping depending on which section of the class you fall into, but we're talking really small change here. 

You cite a study that a vast majority of cases like this produce no benefits to most members in the class action itself. 

Generally speaking, yes. The members of a consumer suit, like this one or anything that basically says a product or service wronged a large group of people, the problem is that you just never see the money. You get one of these emails that drops into your box, even if it makes it past your spam filter, what are you going to do? Go claim your $2 in winnings? 

The lawyers, I guess, would argue that without class action lawsuits against companies like Ticketmaster, there's no way for these companies to be policed and to actually charge fees that are reasonable and actually reflect their true cost. Isn't that the real benefit in the litigation?  

And they're 100% right. Class action suits are a very good idea, but the problem is that for a class action suit to get to this point, the consumer has already been wronged. If you bought from Ticketmaster, you were taken for a ride or allegedly. So the problem with not getting any of the money to the class members on the back-end is that they're not actually getting back what they were said to have lost. 



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