StubHub to pay $295,000 in settlement with California over Covid refund policy

SAN DIEGO (CN) — Ticket reseller giant StubHub will have to pay a $295,000 penalty after failing to quickly refund Californians for concerts and sports games that were canceled at the beginning of the Covid-19 pandemic.

The settlement in Los Angeles Superior Court, announced Friday by California Attorney General Rob Bonta, includes terms that require the company to make sure it pays back customers in cash — or credit if they prefer — who purchased tickets on their site for events that were canceled prior to March 25, 2020, and provide the state with lengthy compliance reports to ensure that thousands of Californians have been repaid.

The settlement also requires the company to abide by terms of California law prohibiting unfair competition and false advertising, including prohibiting the company from continuing to misrepresent or failing to honor its ticket refund policies.

In its complaint, filed Thursday, the state claims the company based its marketing efforts around a “FanProtect Guarantee” policy that promised a full refund if an event was canceled. But when the first wave of Covid-19 hit, the company dropped the policy and announced that customers would receive 120% credit for future ticket purchases on their site, not a full refund.

That slick move violated California law, the state claims.

“By failing to issue full cash refunds for canceled events during the pandemic, StubHub not only violated its advertised policy but also violated the trust of its consumers,” Bonta wrote in a press release announcing the settlement. “My office proudly works to keep California consumers safe from false or misleading business practices. If you believe you are the victim of false or misleading advertising, please report it to oag.ca.gov/report.”

After the state investigated the company, it reversed its refund scheme in 2021 and began giving out cash refunds, amounting to $20 million for 45,000 customers.

John Lawrence, deputy general counsel for StubHub, pointed the company was pleased to have reached a resolution withe Bonta’s office.

“In 2021, as soon as circumstances allowed, StubHub ensured that consumers impacted by this adjustment were made whole, offering them the choice between retaining their 120% credit for canceled events or receiving a cash refund. We remain committed to upholding our FanProtect Guarantee and ensuring the best possible experience for our customers,” he said in a statement.

California joins a number of other states that have settled with StubHub over their Covid refund policies. In 2021 Washington D.C. and 10 states settled a similar suit for $9.5 million.