Ticket resale website Viagogo has used company credit cards to buy tickets to popular events which it then sold at inflated prices, a former worker has alleged.
Not the ticket: An ex-employee has said Viagogo has not acted in the best interests of customersThe member of staff, who wishes to remain anonymous and worked at Viagogo last year, contacted This is Money with complaints about how the website operated to the detriment of ordinary ticket-buying fans.
He said staff snapped up popular tickets from primary sellers, using company credit cards, to sell on at inflated prices and worked with external brokers who regularly sell large numbers of tickets at more than face value.
Viagogo's stated aim is that: 'Our mission is to bring efficiency and transparency to what has traditionally been a murky market place, thus allowing consumers to buy and sell tickets in a safe and guaranteed way.'
Viagogo charges both ticket sellers and buyers fees.
Its ticket buying fees are not listed on the site until customers go to purchase tickets.
Example fees for a pair of George Michael tickets on sale at £149.99 each for the Albert Hall in October are a booking fee of £45, shipping of £11.95, plus VAT of £11.39, delivering total fees and VAT of £68.34.
Seller fees are listed as 10% plus VAT on that, this would deliver a selling service fee and VAT of £36.
Face value for similar George Michael tickets for this date and seats was £50.75 to £72.75.
The ticket reselling industry has promoted itself as a place for fans to sell on unwanted tickets to other fans, but has been criticised for offering a forum for touting.
The former employee alleged that:
• Viagogo staff used company credit cards to buy a large number of tickets from primary sellers, then resold them on Viagogo. It made money on the inflated ticket price and charging administration fees to the eventual buyer of the tickets. Viagogo staff would list tickets on the site in a way which would push prices higher.
• Viagogo staff worked directly with external 'brokers' who post tickets for sale on Viagogo. This was done through the sales team who maintained constant contact with these external sellers to maximise profits.
• Viagogo's claim that '95% of the people who sold tickets on our site sold fewer than 10 tickets' does not reflect the high number of tickets being sold by a small number of sellers. The remaining 5% of sellers are responsible for a disproportionately high number of tickets sold on the site.
The whistleblower said: 'Internal staff would use company credit cards to buy tickets from primary sellers to then resell them on Viagogo. This would mostly be for high-profile and popular events.'
'For example, staff bought tickets to a Peter Kay event to immediately resell them at a profit. In my experience this happened on a number of occasions.'
This is Money approached Viagogo with the accusations.
Edward Parkinson, UK director of Viagogo, said that staff had used company cards to buy tickets but that this was a measure to ensure that Viagogo could fulfil its promise to supply tickets to buyers.
Mr Parkinson said: 'Viagogo guarantees that fans will receive the tickets that they paid for in time for the event. In the rare case that the seller of a ticket has difficulty providing that ticket, Viagogo will do everything it can to find a replacement ticket, or in the worst case give a 100% refund.
'In order to honour our guarantee where a seller fails to provide tickets, Viagogo will occasionally purchase a few tickets from the box office to ensure a customer gets the ticket they paid for.'
When challenged that Viagogo's claim that '95% of the people who sold tickets on our site sold fewer than 10 tickets' disguised the large amount of tickets sold by the other 5%, Mr Parkinson said: 'The overwhelming majority of sellers on Viagogo are ordinary sports and music fans. There are a small group of sellers who will have legitimate reasons for gaining access to a larger number of tickets, such as travel agents, debenture holders and individuals who own the rights to boxes and suites at certain venues.'
Viagogo failed to reveal what proportion of tickets are sold through its site by the 5% of sellers who list more than 10 tickets.
In response to the accusation that staff kept in contact with big external sellers, Mr Parkinson said: 'Whether an individual lists one, ten or more tickets on our site, Viagogo provide all buyers and sellers with customer service support to ensure that they understand how to use the service and that their transactions are completed successfully.'
This is Money has previously warned that ticket reselling often pushes prices higher for ordinary ticket buying fans.
We have questioned instances where emails from resale websites have offered tickets to popular events almost immediately after have the tickets have gone on sale from the primary source. How is it possible that fans buying these tickets have decided so quickly that that they cannot attend?
How we covered the issue before
We launched the campaign against ticket-rip offs in December 2007. It called for the end of spiralling 'booking fees' associated with booking tickets as well as an investigation into the secondary market.
One year later Simon Lambert wrote an article on ticket reselling where he put questions to GetMeIn, Viagogo and Seatwave about how many fans really use their sites.
In 2009 the Department for Culture, Media and Sport carried out a white paper into the secondary ticketing market. It concluded that reselling is an established element of the ticket market however it would continue to keep an eye on consumer concerns.
In March last year This is Money received dozens of comments after fans comedy TV series, Flight of the Conchords, were left angry after they could not buy tickets, yet many appeared on ticket reselling websites minutes after they had originally gone on sale.
In August last year we reported how Carl Barat emailed fans to say that the system they put in place to get tickets to a Libertines comeback gig was to prevent secondary reselling of tickets. Earlier this year Which? made a super complaint to the OFT against the sneaky charges imposed by budget airlines and other companies for card payments - it is hoped that this will cover booking fees on tickets.
Last month, Labour MP, Sharon Hodgson proposed that anyone reselling tickets should only be able to make a 10% profit on the original price. The bill is due for discussion in parliament later this year.
Earlier this month we published an article discussing the proposed cap. See how the re-selling websites defended themselves.