The Justice Department and the Federal Trade Commission filed a complaint on Thursday against ticket broker REPS & Company Inc., alleging it bypassed ticket issuers' security measures to buy millions of tickets above purchase limits and resell them. The Justice Department filed the case in the U.S. District Court for the Southern District of California on behalf of the FTC.
The complaint alleges that since 2022, REPS spent more than $1.3 billion to amass more than 18.5 million tickets for at least 83,500 events. It says the company made at least $120.8 million in profit by reselling them on the secondary market. The defendants include CEO Ryan Pancheri, President Brian Archibald and Chief Operating Officer Nicholas Totagrande. The complaint alleges violations of the FTC Act and the Better Online Ticket Sales Act.
The Better Online Ticket Sales Act bars circumventing security measures or access controls that ticket issuers use to enforce posted ticket limits, the FTC said when it announced the referral.
According to the complaint, REPS uses a team of employees, most of them in the Philippines, to get around account security at Ticketmaster and other ticket issuers. The methods include thousands of accounts created with names, addresses or phone numbers belonging to other people, along with virtual credit cards and phone numbers controlled by REPS. The employees also used IP proxy services and multi-session browsers to mask account users' identity and location.
When issuers blocked or canceled purchases, REPS made slight changes to an account holder's name or address, the complaint alleges. The FTC said internal company documents show REPS officials discussed ways to keep their accounts from being blocked.
In one example, REPS used 1,300 accounts to buy 7,624 tickets to a single Beyoncé Renaissance tour concert in Kansas City, Missouri, in 2023, generating $833,000 in profit, the complaint alleges.
The complaint describes an internal "Error Bible" that tracked Ticketmaster error codes and told employees how to work around ticket limits, according to Billboard. It also says REPS bought 5,430 tickets to a 2024 Pitbull show at Empower FCU Amphitheater, according to Billboard.
"REPS' entire business model is focused on trying to game the ticket-purchasing system in order to obtain as many tickets as possible to resell at inflated prices to consumers," Christopher Mufarrige, director of the FTC's Bureau of Consumer Protection, said in a statement.
Assistant Attorney General Brett A. Shumate, who leads the Justice Department's Civil Division, said in a statement that the department will continue to enforce the law "alongside the FTC."
The FTC voted 2-0 to refer the complaint to the Justice Department. The agency said it makes such referrals for civil penalties when it has reason to believe the law is being or is about to be violated and a proceeding is in the public interest.
The claims are allegations only, and there has been no determination of liability, the Justice Department said. The court will decide the case. REPS did not immediately respond to a request for comment, according to Billboard.