General Assembly tackles consumer transparency, fails to fix ticket service fees

RICHMOND — Virginia lawmakers, in alignment with recent federal attempts, introduced consumer protection bills to tackle surprise tickets fees and recurring subscriptions, but only one measure passed.

Autorenewal notification updates — passed Del. Michelle Maldonado, D-Manassas, introduced House Bill 744 to update current state code to add “small business” to the existing consumer protections for auto renewal. That includes any goods, services, money or credit for business purposes.

Maldonado was presented with the issue by a constituent and small business owner concerned about auto renewals for subscription services, she said.

“I think that it is always good for companies, for businesses and for consumers when there is clarity and a consistency of process,” Maldonado said. The state legislature in recent years has grappled with transparency around auto renewal notification and ensuring the consumer has a way to cancel their subscription. An update last year set a time frame that the business must notify the consumer within 30 days.

Maldonado’s bill now requires subscription services to inform customers of the option to cancel no less than 30 days and no more than 60 days of the billing date, if the contract is longer than 12 months.

For Virginians in a tumultuous financial situation, surprising or inconvenient subscription payments can mean the difference between paying a bill or putting gas in the car, according to Maldonado.

Maldonado is hopeful the bill will pass Gov. Glenn Youngkin’s desk because it had strong bipartisan support in both chambers.

Ticket service fees and scalping — failed Del. Dan Helmer, D-Fairfax, introduced HB 277 to mandate that any ticket sold must display the total price upfront, including a resale ticket. New York, Tennessee and Connecticut have similar laws, according to a Ticketmaster brief on the topic. Sen. Stella Pekarsky, D-Fairfax, introduced Senate Bill 388, which had similar language in regards to misrepresenting a good or service and the disclosure of fees. It was amended in the House to reflect the language in Helmer’s bill.

Both bills passed their respective chambers with strong bipartisan support but could not pass a conference committee that tried to resolve the differences between the House and Senate amendments.

The House committed to creating a “ticket fee transparency act” that also allowed the attorney general’s office to litigate certain violations. In the end, there was a tied vote in the House and the Senate which ultimately kept the bills from passing after the presiding officers voted. HB 277 draws inspiration from the evergreen discussion around ticket costs for the Taylor Swift Eras tour, Helmer said.

But before that outrage existed, Pearl Jam challenged Ticketmaster in 1994. The band was frustrated by the ticket fees passed on to consumers, in part due to Ticketmaster’s exclusive contracts with stadiums, according to Rolling Stone.

Helmer learned from his staff how drip pricing fees sneakily make an already expensive ticket cost even more.

“I’ve been in the trenches fighting for price transparency for years,” Helmer said.

Helmer is excited to see this discussion taking place on a national level, but surprised the bill could not pass.

“We were disappointed because we’ve got to get rid of these junk fees,” said Stephanie Sedgwick, Helmer’s chief of staff.

Drip pricing and hidden fees are present in purchases such as airline tickets, food delivery and ticket pricing. A 2023 Senate Joint Economic report defined drip pricing as the practice of businesses showing a low base price, but various fees are added to the total throughout the purchase process.

A customer purchases a ticket that originally states the price is $50. As the purchasing process continues, the total increases when various convenience fees or services charges are added. The price may be nearly doubled by the time the checkout process is complete. Ticketmaster has transitioned toward optional all-in pricing to remove some of its added surprise fees. President Joe Biden met with representatives from many entertainment and lifestyle companies in June 2023, including Ticketmaster, DICE, SeatGeek and AirBnB.

Consumers using Ticketmaster can now see a display that explains the new all-in pricing model, if the venue or artist opts in. The tickets display all included fees as part of the total to pay, instead of additional fees tacked on to the end price.

However, fees can still be added to verified resale tickets through Ticketmaster. One example of this is the price of a resale two-day pass for live electronic act Pretty Lights in Hampton. An event pass with a listed price of $191 becomes over $230 during the checkout process.

Lucas Anderton is creative director for the political communication tech firm SBDigital and an avid concert goer. Anderton has traveled regularly to see some of his favorite jam bands like Phish and Goose, and knows tickets are difficult to find. The surprise ticket fees make it even harder, and also diminish transparency for fans.

“I think that we’re seeing fees that are as much as 75, 80% of the ticket value,” Anderton said. “It’s such a turn off.”

Hidden costs associated with rentals like AirBnB also directly relate to a music fan’s negative experience, considering the amount of people who travel for these big events, according to Anderton.

He is looking forward to all-in pricing becoming more common.

“I think that’s No. 1, is when you first click on that seat on the seat map, the seating chart, like the price it shows you is with fees and everything,” Anderton said.

Ongoing federal efforts The Biden administration has addressed drip pricing and junk fee issues since 2022. The White House announced a new strike force in early March this year that will examine “unfair fees,” which could save consumers an estimated $20 billion annually.

The Strike Force on Unfair and Illegal Pricing will also confront the issue of credit card late fees, which could reportedly save consumers $10 billion a year. The Credit Card Accountability Responsibility and Disclosure Act took effect in 2010 and set a precedent where banks could only charge late fees to cover the cost of a late payment.

Companies were allowed to set a $25 fee for the first late payment, and $35 for subsequent late payments, which increased to $30 and $41 due to annual inflation. Late fees are a “major driver” in the credit card company profit model, according to a report from the Consumer Financial Protection Bureau, or CFPB.

The CFPB in early March set the threshold for these late fees at $8. Larger card issuers can charge fees above the threshold if they can prove it will cover actual collection costs.

Capital News Service is a program of Virginia Commonwealth University’s Robertson School of Media and Culture. Students in the program provide state government coverage for a variety of media outlets in Virginia.