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Ticket Agents

I congratulate my hon. Friend the Member for Wirral, South (Ben Chapman) on securing a debate on an important subject that is of lively and continuing interest to hon. Members on both sides of the House and to many of our constituents. I should declare a lively personal interest: I am an avid theatre-goer and opera-goer, and the mother of an aspiring theatre director. We all want the situation to be right. I am, of course, aware that consumers are often concerned by what they feel are very high fees charged by ticket agents. Most consumers accept that taking advantage of the benefit of using a ticket agent will involve some extra cost, but many of us dislike paying the fees charged by primary ticket agents and others on top of the face value of a ticket. Many consumers think that the charges are too high, and trading standards services and the Office of Fair Trading report that consumers have concerns about slowness of transactions and the non-delivery of pre-paid tickets. As my hon. Friend said, these issues were explored in the OFT’s 2005 report on ticket agents, which examined the services provided to consumers, and I want to talk about the work that the OFT is undertaking. Collectively, ticket sales in the UK are now a very large market. These figures are somewhat out of date, but in 2003 the estimated total value of advance tickets sales in the UK was about £1.4 billion, of which about £580 million came from sales through primary ticket agents—those in which my hon. Friend has the most interest—which have agreements with the promoters of events. Again, although the figure may be a little conservative, the OFT estimates that the business between 1999 and 2003 grew by about 150 per cent. That increase resulted in part from more events being held—we all welcome that—but we also believe that it was partly due to consumer demand for greater convenience when booking a ticket, and the increased use that we all make of the internet to buy tickets. Tickets sold through primary ticket agencies will usually include the face-value price, as printed on the ticket itself, a booking fee charged for each ticket and the additional processing fee for the transaction, which relates to the printing, postal charges and other administrative costs involved. Event promoters negotiate with artists’ agents for the number of appearances, and they determine the face value of tickets and the allocation and distribution of tickets between the venue box office and ticket agencies. Artists and their agents may also require a share of available tickets, which they may distribute as they see fit. As we all know, the demand for tickets for some events may turn out to be greater than expected. That excess demand provides secondary agents with an opportunity to resell tickets at an even higher price to those who really want to attend and who are prepared to pay a premium to get the tickets. As my hon. Friend said, whatever the source of the tickets, one of the main concerns is that consumers need to be properly and clearly informed about all charges so that they can make an informed choice. Consumer law on price indications imposes a requirement on all traders to give information on pricing clearly to consumers, so that they can compare prices in different outlets and make informed choices about what is best value for money. Although it is for the consumer to decide whether to buy a ticket that is being resold, it is important to ensure that they have clear information on which to base that choice. There are specific legal requirements on ticket agents that resell tickets to provide consumers with the price and any other details that appear on the ticket, such as the location of the event or the seat number. That is to ensure that potential buyers have the relevant details before they buy. Trading standards services have taken enforcement action against a number of ticket agents in cases in which breaches of the legislation have been identified as causing collective harm to consumers. The OFT will, of course, continue to work with trading standards to ensure that all ticket sellers comply with the relevant consumer protection legislation, and it will take enforcement action when it believes it to be necessary. As my hon. Friend probably knows, the current regulations will be replaced as part of the implementation of the unfair commercial practices directive, which we are transposing into UK legislation. We expect the regulations to come into force in April 2008, and they will be a major piece of legislation that will ban unfair marketing and selling practices in the ticket market. They will require all ticket traders to provide consumers with the material information that they need to make an informed purchasing decision. There are also understandable concerns surrounding bogus ticket agents advertising fake entertainment events or tickets that they do not have. Those are plain and simple frauds, and they too can be prosecuted when the victims bring the evidence to the attention of trading standards officers. Another concern to consumers is the use of unfair terms in ticket agencies’ standard terms and conditions. The law on business to consumer contracts requires businesses not to use unfair terms in their contracts. Both the OFT and trading standards services act in a number of ways to try to improve the terms on consumer contracts. They may do so through campaigns to raise consumers’ awareness of their rights, through guidance that is published and by taking enforcement action to prevent the use of unfair terms in a contract. In 2003, the OFT published guidance on unfair terms in consumer entertainment contracts to ensure that the standard terms used in the contracts and in the ticket sector are fair. Work continues on identifying and tackling ticket sellers who do not comply with the law. As my hon. Friend has said, the OFT has reported on the ticket agents market. The study concluded that consumers need better information about tickets to enable them to shop around for the best deal, but it also concluded that some ticket agents’ standard terms may contain terms that the OFT would generally consider potentially unfair. The report noted that event promoters and primary agents can impose conditions on the sale of their tickets and can invoke laws, such as those to do with breach of contract, to prevent the resale of tickets. The OFT is currently working with the ticket agency industry’s representative bodies, such as the Society of Ticket Agents and Retailers, with the aim of producing fair model terms and conditions that could be used by all members. That is a significant advance in the market. My hon. Friend expressed concern about the level of competition in the ticketing industry which, as he knows, was an issue considered by the OFT, as the promotion of competition and the enforcement of competition law are central to its functions. Its report considered whether there is a lack of competition that could result in disproportionately higher fees being applied than would otherwise be the case. It looked, in particular, at the effect of the vertical agreements between event promoters and primary ticket agents. However, as he knows, the report did not find any evidence that those agreements hinder competition. The OFT concluded that competition between rival ticket agents to secure agreements with promoters tended to enable lower costs to be passed on to consumers in the form of lower prices. As I mentioned, however, the OFT has made recommendations to improve information for consumers. Most consumers tend to make an initial decision on whether or not to go to an event on seeing an advertisement, but full information on charges is often only available within the transaction itself. It is very often the only way to obtain accurate price information without contacting the ticket seller. That can make it much harder for consumers to opt out of the purchasing transaction, especially if they think that the event that they want to attend is likely to sell out quickly. It is an essential part of consumer protection that advertisements do not mislead consumers. It is important that they inform people. The OFT is looking at the rules governing event entertainment advertising. It found that the code of non-broadcasting advertising practice, written and enforced by the industry committee of advertising practice and independently administered by the Advertising Standards Authority, is less than satisfactory, as non-broadcast advertising tends not to carry price information. The report therefore recommended that the guidance on event advertising be reviewed and amended to include, among other things, the requirement that advertisers display the face value of the ticket, while indicating where additional fees may apply and whether they could vary depending on the sales channel and the ticket seller used. It recommended, too, that event organisers follow up any amended guidance to provide consumers with the fullest possible information when advertising events. In general, the OFT study found that where consumer protection regulation is applied, it appears to be working well and that most consumers express high levels of satisfaction with the ticket-buying process. However, as my hon. Friend pointed out, there are areas for improvement, and the Government fully support the OFT’s initiatives to secure these improvements. My hon. Friend suggested a number of measures to make the market in tickets more transparent and to make it work better for consumers which, broadly speaking, fall within the scope of the OFT report. As regards clearer advertising, the OFT recommended that the guidance be amended. I will pass on to the OFT the full text of my hon. Friend’s speech so that in further discussions it can take account of what he has said. I will ask, too, for its views on the other proposals that he has made, as they are closely related. I will write to him with details of those views. The OFT will certainly wish to have the opportunity to consider his proposals, discuss them with interested parties and, if appropriate, make further recommendations on the market. In conclusion, I thank my hon. Friend for raising these important issues and for giving me the opportunity to explain the protections that already exist for consumers and the work that we have in hand to offer better transparency and more information. I will ask the OFT for its views on his suggestions. Like him, we want consumers to be informed and empowered in the marketplace. We will therefore continue to work closely with the OFT and other authorities to achieve that shared objective. Question put and agreed to.