Ticketmaster marketing getting state's attention
By GRAHAM BRINK
© St. Petersburg Times, published December 18, 2000
In August, Valrico resident Victoria McLean called Ticketmaster to buy two tickets to see the aging British rock group the Who at the Ice Palace.
The operator asked McLean whether she wanted a free trial subscription to Entertainment Weekly or to buy tour memorabilia. She told the operator in her lilting English accent that she simply wanted the tickets, nothing else.
A short time later, a $372.17 charge showed up on her MasterCard bill for 11 tour T-shirts and pins. Then came notice that her subscription would soon arrive. Her credit card would be billed $24.95 unless she called to cancel.
"I couldn't believe Ticketmaster had given my credit card number to another company," McLean said. "It was really upsetting. It also struck me as possibly illegal."
It just might be.
The Florida Attorney General's Office is investigating more than 20 similar claims against Ticketmaster and Time Inc., which publishes Entertainment Weekly. Those are just the complaints that have made it to Tampa, where Time Inc. has its customer service center.
Investigators want to know whether the companies are using deceptive marketing practices or violating Florida statutes about unauthorized disclosures of credit card information. There's also a class action lawsuit in the works.
The ordeal left the consumers who complained wondering whether these types of promotions are just the beginning as the industry fights falling circulation brought on by factors such as the demise of the much-derided sweepstakes.
It also raises larger privacy issues in this era of increasingly pervasive marketing. Addresses and phone numbers are routinely sold or exchanged. But the prospect of companies sharing consumers' financial information leaves many feeling uneasy.
Consumers who order tickets to shows or concerts with Ticketmaster routinely receive a pitch for Entertainment Weekly. Buyers of tickets to sporting events get the pitch for Sports Illustrated, another Time product.
If the caller expresses interest, the Ticketmaster operator explains that they will receive six to eight weeks free, after which the credit card they used to purchase their tickets will be billed indefinitely until the customer specifically asks for the subscription to stop.
The process is called "continuous service" or "evergreening." It's an effort by the magazine industry to retain readers and make subscribing less of a nuisance.
Ticketmaster officials say they are simply in a marketing agreement with Time. If a customer wants a magazine subscription they can set it up. They are not "giving" away credit card information, said spokesman Larry Solters.
Operators are supposed to follow a careful script when talking with customers about the magazine offers. Operators who try to earn extra commissions by signing people up without permission are fired, the officials said.
"We provide an 800 number for people to call to get refunds if there is any confusion," Solters said. "I don't know what else we can do for the customer."
Some consumers don't see it that way.
Ticketmaster customers such as McLean said they turned down the offer but received the magazine anyway. Others, including Wilmington, N.C. resident Donna Gunter, said the Ticketmaster operator never mentioned the promotion. The magazine notice just arrived in the mail one day. It was up to them to call to cancel, or have their credit cards charged.
Gunter wrote a blistering letter to the Better Business Bureau scolding Ticketmaster for not only being dishonest but also for refusing to own up to the dishonesty when she called to complain. The company, according to Gunter, refused to say that it had shared her credit card number with Time.
"The whole thing felt like a violation," Gunter said. "I'd like to see it outlawed."
Many of the consumers who complained were stunned to find out another company had their credit card number. Thoughts of credit card fraud, blown credit ratings and stolen financial identities swirled through their heads.
Handwritten insults filled the letters consumers wrote to Time and Ticketmaster.
"What a scam you have going!" a woman from Omaha, Neb. wrote. "Don't you dare charge this magazine subscription to my credit card!!"
A man who bought Cleveland Browns tickets through Ticketmaster and ended up getting Sport Illustrated called the practice "by far the worst form of trickery and a blatant disregard for consumer interests."
A mother in Mission Viejo, Calif. summed up the frustration many others expressed. "I have spent an hour on getting this taken care of. An hour that I could have spent with my kids!" she wrote.
For McLean, the frustration went beyond wasting time and energy. She, like many others, was worried about what else might mysteriously show up on her bill. She went ahead and canceled the card.
"If they did it once, who else might they have given my card number to?" said McLean, who received a refund for the subscription and memorabilia.
In Florida, disclosure of credit card information without the cardholder's consent is a first-degree misdemeanor. Also, orders for magazine subscriptions are supposed to be in writing.
Tampa lawyer Chris Hoyer hopes to employ those laws to help end what he called "a criminal violation of consumer trust." His firm, James, Hoyer, Newcomer & Smiljanich, specializes in class action suits and has recovered hundreds of millions of dollars in the past decade suing insurance companies for fraud.
Hoyer plans to file a class action suit against Ticketmaster and Time Inc. in the next few days. McLean is the lead plaintiff.
As Hoyer sees it, there is also a bigger privacy issue in play. Businesses have always worked hard to retain customers. But today's technology makes it easier to track their spending habits, demographics and financial information. Somewhere privacy boundaries must be drawn, Hoyer said.
Big business, he thinks, will do what's good for profits. As he points out, even Ticketmaster's own Web site guarantees consumers that it will not share their financial information. It's up to the consumer to decide where to draw the line, he said.
"People are tired of the bombardment on their privacy," Hoyer said. "If we hit companies in the pocketbook they might just stop doing it."
The sweepstakes, run by companies such as Publisher's Clearinghouse and American Family Publishers, accounted for a big chunk of new subscriptions -- more than 60-million a year in the early 1990s. In the wake of a number of scandals and lawsuits, they now account for only a fraction of that amount.
In filling that void, magazine companies have had to spend more money and use new techniques to market their product. Companies have to be careful not to alienate potential subscribers when exploring the new territory, said Michael Loeb, whose company, Synapse, developed many of the current marketing alternatives to the sweepstakes.
"They absolutely must be sure the consumer is making an informed choice," he said. "No funny business. Nothing misleading."
The experience has soured McLean on both companies. She said she would be reluctant to use Ticketmaster again, although it may be tough to avoid. On the brighter side, she sees the hassles as a lesson learned. It has made her an even more vigilant consumer.
"You have to always be watching out," she said. "Businesses want your money. Sometimes they'll cross the line to get it."
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