TM’s Springsteen Settlement

TM, now under the Live Nation Entertainment fold following last month’s merger, was charged by the FTC with using “deceptive bait-and-switch” tactics to sell tickets to consumers last year for Springsteen concerts in May and June, and failing to be clear about the risks of buying tickets from resale sites.

When tickets for the shows went on sale Feb. 2, 2009, many fans visiting the Ticketmaster site were met with a “no tickets found” message. The FTC alleged that TM then directed unknowing customers to TicketsNow, where they often paid multiple times the face value for tickets.

“Buying tickets should not be a game of chance,” FTC Chairman Jon Leibowitz said in a statement. “Ticketmaster’s refrain is that it sold through TicketsNow to give consumers more choices. But when you steer consumers to your resale Web sites without clear disclosures, and they unknowingly buy tickets at higher prices, they’ll be left with a sour note.”

To add insult to injury, many tickets sold on the TicketsNow were merely speculative “phantom tickets,” the FTC charged, and the company “held onto consumers’ money, sometimes for months, when it knew those fans weren’t going to see Springsteen.”

Under the terms of the settlement, customers who paid above face value for tickets on TicketsNow, sometimes for much as quadruple the cost, will be eligible to receive a refund of the difference.

The FTC has also issued a letter that could signal changes ahead for the secondary market. While ticket resalers often rely on holdbacks and speculative sales, the FTC has warned that companies that fail to disclose whether tickets are “in hand” could be misleading consumers and considered in violation of the law.

Click here for the complete FTC announcement.