TicketNetwork has agreed to pay $750,000 as part of a settlement after the state alleged that the company, which sells tickets on the secondary market, profited from deceptive practices on partner websites.
The settlement, which awaits court approval, follows state allegations that TicketNetwork partners Ryadd Inc. and SecureBoxOffice LLC engaged in unfair trade practices by representing themselves as official ticket sources, as opposed to secondary markets in which tickets are resold, sometimes at prices above face value.
The state said TicketNetwork "knowingly has profited from the deceptive venue-mimicking tactics of Ryadd and SBO."
The allegations were included in a complaint filed in U.S. District Court by the state attorney general at the request of the state Department of Consumer Protection. The complaint names TicketNetwork Inc.; a subsidiary, TicketSoftware LLC; and partners Ryadd and SecureBoxOffice. Joining in the complaint was the Federal Trade Commission.
"This settlement will help Connecticut consumers avoid confusion and deception in the ticket resale market," Attorney General George Jepsen said in a press release. "Today's consent order ensures that consumers will not be misled, whether intentionally or unintentionally, when seeking to purchase tickets through a reseller."
Ryadd and SecureBoxOffice will be prohibited from using the word "official" on their websites and from predominantly displaying names of venues on their sites and in Internet addresses. The companies must clearly disclose that the site is a resale market, not a box office, that the ticket prices may exceed face value, and that their resale websites are independent and not owned by a venue, team or promoter.
Additionally, as part of the settlement, TicketNetwork Inc. must pay the state $750,000; Ryadd co-owners Ryan J. Bagley and Charles A. Lineberry must pay a total of $550,000; and SecureBoxOffice owner James Moran must pay $100,000. The state said the money will be used to resolve consumer complaints, to educate consumers and to enforce consumer protection.
Both the complaint and the consent orders resolving it were filed Thursday. Because the state filed an official complaint before resolving the situation with TicketNetwork and its affiliates, the settlement is enforceable in court.
The complaint alleged that Ryadd and SecureBoxOffice had been buying online search engine advertisements that directed users to what were described as official ticket sources but were really sites Ryadd and SuperBoxOffice owned, offering TicketNetwork inventory. The sites prominently displayed the names of venues such as XL Center and Radio City Music Hall at the top of their pages, implying that customers were buying tickets directly from those primary sources, the complaint said.
According to the complaint, TicketNetwork "knew or should have known" about Ryadd and SecureBoxOffice's deception. It also alleged that TicketNetwork "directly participated in their deceptive acts" in certain instances.
TicketNetwork spokesman Darnell Goldson said Thursday that TicketNetwork was not at fault for Ryadd's and SecureBoxOffice's misrepresentations and will help police its partners in the future.
"We were pleased to reach this positive resolution and move on from it," TicketNetwork spokesman Darnell Goldson said. "We're going to follow the guidelines reached in the settlement. We're going to have some very minor operational changes to our business."
Attempts to reach Ryadd and SecureBoxOffice were unsuccessful.
A spokeswoman for the Department of Consumer Protection said its initial investigation began in spring 2011, coordinated with the attorney general's office, and it began working with the Federal Trade Commission slightly more than 18 months ago.
Consumer protection Commissioner William M. Rubenstein said in a press release: "We pursued this action to bring some needed transparency to secondary ticket market transactions. Through today's settlement, TicketNetwork will more clearly advise consumers that they are purchasing through the resale ticket market rather than through a venue's box office. Armed with accurate information, consumers can make better-informed decisions about whether the resale ticket market provides them with the tickets and services they value at reasonable prices."
Launched in 2007, TicketNetwork sells tickets to sporting events, concerts, plays and other entertainment. Ryadd and SecureBoxOffice are part of the TicketNetwork resale partner program, which allows other resale companies to distribute TicketNetwork's inventory.
TicketNetwork was once part of Gov. Dannel P. Malloy's First Five initiative, designed to reward businesses that create jobs in Connecticut. The company withdrew from the program in 2012.
An earlier version of this story reported that TicketNetwork needed to alter its website as part of the settlement. The consent order cites the partners' websites, not TicketNetwork's.