Ticket Scalping Laws in NSW: Offences of Profiting from the Resale of Event Tickets

Reports have surfaced this week that unsuspecting Taylor Swift fans have lost around $135,000 recently to concert ticket scams. 

Social media accounts hacked

The Australian Competition and Consumer Commission’s (ACCC’s) Scamwatch has received at least 273 reports relating to  across the nation whereby tickets to the singing superstar’s upcoming Australian Eras tour were falsely advertised. 

The majority of the reports were made by individuals in New South Wales and Victoria, where 114 and 96 occurred respectively.

Those perpetrating the fraud are reported to be hacking social media accounts of others and using the platforms to advertise tickets that do not exist. Fake posts are put up on the pages and/or messages are sent to friends’ lists claiming the purported ticket holder is not able to attend and that the tickets are up for grabs. 

The hapless victim then transfers money into an account controlled by the scammers – never to see the money again, and never to receive the tickets.

As the concerts draw closer, desperate ticket buyers are also being warned not to fall prey to ticket scalping, a form of price gouging, where re-sale tickets prices are highly inflated due to demand. 

According to the Eras concert organisers, the resale of Australian resale tickets will not be permitted until a week before the concerts, in an effort to clamp down on such predatory conduct. 

Ticket scalping can amount to a criminal offence in New South Wales

It’s important to be aware there are laws in place in both New South Wales and Victoria which criminalise excessive profiting from the resale of certain items, including event tickets and gift cards, as well as advertising and enabling the advertisement of excessively priced items.

Offences relating to advertising or reselling event tickets in New South Wales

In that regard, new provisions were inserted into Part 4A of the Fair Trading Act 1987 (NSW) (‘the Act’) on 1 June 2018 making it a criminal offence in New South Wales to advertise or resell tickets to events well in excess of the original supply cost; in other words, to price gouge, or to advertise or allow the advertising of same.

Prohibited advertising of event tickets

Section 58F of the Act prohibits advertising a ticket for resale for more than 10% above the ticket’s original supply cost.

The ‘original supply cost’ is the initial ticketed price (which is usually specified on the ticket itself) plus any associated costs, such as booking and delivery fees, and any credit card surcharge.

The section further requires advertisements to specify both the original supply cost for any ticket as well as details of the location from which the ticket holder is authorised to view the event; for example, any bay, row and seat number, or the general admission area if it is a general admission ticket.

The offence of profiting from the resale of event tickets

Section 58G(1) of the Act makes it an offence for the first purchaser of a ticket to sell it to another person for more than its original acquisition cost.

The ‘original acquisition cost’ is defined as the original supply cost plus any additional transaction cost. 

Section 58G(2) makes it an offence for a person other than the first purchaser of a ticket to sell it to another person for an amount the person knows, or ought reasonably know, is more than its original acquisition cost.

The maximum penalty for either offence is 200 penalty units for an individual or 1000 penalty units for a company.

At the time of writing, one New South Wales penalty unit is equivalent to $110, which means the maximum fine is $22,000 for an individual or $110,000 for a corporation.

The offence of making the supply of event tickets contingent on other purchases

Section 58H(1) of the Act makes it an offence to create an agreement whereby the supply of an event ticket is made conditional upon payment by the recipient of any amount for any other goods or services.

So, for example, it is unlawful for department store to ‘throw in’ concert tickets with the sale of a big screen television.

The maximum penalty for the offence is 200 penalty units (currently $22,000) for an individual or 1000 penalty units ($110,000) for a company.

Statutory exception

However, section 58H(2) makes clear the offence does not apply where the supply of a ticket occurs pursuant to an agreement authorised by the event organiser, or an agreement that is otherwised authorised by the Fair Trading Regulation 2019 (NSW).

The offence of failing to ensure a prohibited advertisement is not published

Section 58I(1) of the Act makes it an offence for the owner of an advertising publication to publish a prohibited publication, which is one described in section 58F (outlined above) that involves seeking to sell an event ticket for more than its original acquisition cost.

An ‘advertising publication’ means any website, newspaper, magazine or other publication containing advertisements to which members of the public have access, regardless of whether or not such access requires a fee, subscription, registration or membership.

An ‘owner of an advertising publication’ includes any person who conducts the business or undertaking of advertising publication, unless excluded by the regulations to the Act.

An ‘advertisement’ encompasses any advertisement, whether paid or not.

The maximum penalty for the offence is 200 penalty units (currently $22,000) for an individual or 1000 penalty units ($110,000) for a company.

Statutory defence

Section 58(2) provides that a defendant charged with failing to ensure a prohibited advertisement is not published is not guilty if he or she establishes ‘on the balance of probabilities’ (ie that it is more likely than not) that:

1. An agreement with the advertiser was subject to terms and conditions prohibiting the publication of prohibited advertisements, and
2. He or she took reasonable steps to ensure the removal of the advertisement as soon as practicable after becoming aware of it, and
3. He or she took such other steps as were reasonable in the circumstances to ensure no prohibited advertisement was published.

Certain restrictions on reselling are void

Section 58J of the Act provides that any restriction on reselling event tickets is invalid to the extent it allows for the ticket to be cancelled other otherwise rendered worthless or unusable if it is resold for an amount not exceeding 10% more than its original supply cost.

The offence of using software to purchase an unauthorised quantity of website tickets

Section 58K of the Act was enacted in response to the growing and persistent practice of using software to circumvent the security features of ticketing websites to purchase large numbers of tickets to events for which there is great demand, before listing them for sale at greatly inflated prices, often shortly after the event is sold out.

The section makes it an offence to engage in prohibited conduct in relation to the use of a ticketing website.

‘Prohibited conduct’ is defined as using any software to enable or assist the circumvention of the website’s security features to purchase tickets in contravention of the website’s published terms and conditions.

Once again, the maximum penalty for the offence is 200 penalty units (currently $22,000) for an individual or 1000 penalty units ($110,000) for a company.

The offence of failing to comply with a Ministerial order to disclose ticketing information

And section 58L of the Act makes it an offence for a specific event organiser or specified class of event organisers to fail to comply with an order by the Minister for Better Regulation and Fair Trading to notify the public of the number of tickets available to an event for general public sale through authorised sellers.

Any such order must be published on the NSW legislation website and given within the time and in the manner specified in the order, and administrative law rules relating to procedural fairness apply.

The section makes clear that a ticket is not to be considered available for ‘general public sale’ if it requires a person to pay any fee in addition to the price of the ticket or register for access to any pre-sale, publication or other special offer.

The event organiser must disclose the number of tickets that he or she believes, on reasonable grounds, is not more than 10% greater or less than the actual number available.

Once again, the maximum penalty for the offence is 200 penalty units (currently $22,000) for an individual or 1000 penalty units ($110,000) for a company.

Victoria

Similar laws to those outlined about have also been enacted in Victoria.

Social media sites need to do more to protect consumers 

Australia has enacted laws against a broad range of online and technology enabled fraudulent activity, with many criminal offences contained in both state and territory legislation as well as the Criminal Code Act 1995 (Cth), the latter of which applies across the nation.

However, scammers can be notoriously difficult to locate and prosecute, and there are calls for social media sites to do more to protect people from scams. 

In 2022, the Online Safety Act came into effect, giving the Australian eSafety Commissioner sweeping powers to gather information about those who post abusive, abhorrent or threatening content – including the identities behind pseudonyms. 

The Act also enables the Commissioner to enforce heavy fines and injunctions for companies which fail to remove offensive or threatening content within 24 hours. 

Many experts believe that similar laws focusing on the e-commerce aspect of social media need to be considered. 

What can you do if you’ve been scammed? 

If you have been scammed, it’s a good idea to report the incident to Scamwatch and contact your bank. 

All banks have different policies, but in many cases banks will be able to help you to retract transactions made online or recover the money –  if possible. Just be aware that usually these services will come with additional fees. Check your insurance policy to see if you’re covered. 

Most importantly, keep all records, and screenshots of your conversations, the person’s username and any relevant account information you have. The ACCC also recommends telling friends and family about the scam – use the power of social media to warn others. Just be careful about breaching a person’s privacy or using words that could amount to defamation. 

The wild west 

While the ACCC is working with law enforcement to try to curb online scams, scammers are smart and the internet, the rise of social media and online banking and payments have provided a fertile breeding ground for all sorts of scams. 

Social media – in particular the marketplaces and community groups – are unfortunately rife with swindlers. It’s big business. Last year, according to figures, collectively, Australians on average lost $47.73 to a variety of online scams. 

All website and social media users are also reminded to keep their own accounts secure, by updating passwords regularly, (many cyber experts suggest you use a phrase, rather than one word) to make them less susceptible to hacking. 

But scams don’t stop at fake purchases, romance scams and catfishing, or other types of dodgy deals. Clicking on a link from someone you don’t know can land you on a malicious website which steals your data. 

The experts say always check the source, and if a person’s profile seems new, or like they have few friends, it could be a red flag. 

Similarly if someone asks you to take the communication off-line and wants to text directly to your phone, this can also be a warning, because it by-passes the inbuilt security mechanisms of social media sites. 

Also be aware that scammers are not always individuals, some go to the trouble of setting up fake companies. And some companies might actually be legitimate, although their business practices might not be lawful. 

In 2022, the ACCC brought a federal case against resale ticketing platform Viagogo for misleading consumers on the sale of live music and sporting tickets. The company was fined $7 million. Viagogo appealed the ruling, but it was upheld in 2022. 

In the meantime, the best advice is undoubtedly a recommendation you’ve heard before – be vigilant, always think twice and remember the old adage; ‘buyer beware’.

Going to court for an alleged breach of ticketing rules?

If you are going to court over a ticketing offence, or would like advice regarding the rules that apply to your situation, call us anytime on (02) 9261 8881 for accurate, up-to-date case specific legal advice and formidable legal representation from lawyers who are knowledgeable and experienced in this area.