The Federal Trade Commission sued REPS & Company Inc., alleging that the ticket broker illegally circumvented measures designed to limit the number of tickets that could be purchased for a single event, by purchasing millions of tickets to high-demand events that it then resold at a significant profit.
The complaint, filed by the Department of Justice after notice and referral from the FTC, alleges that REPS, along with its CEO Ryan Pancheri, its President Brian Archibald, and its Chief Operating Officer Nicholas Totagrande, violated the Better Online Ticket Sales Act. The law prohibits the “circumvention of a security measure, access control system, or other technological control or measure on a website or online service used by the ticket issuer to enforce posted event ticket limits or to maintain the integrity of posted online ticket ordering rules.”
The complaint alleges that, since 2022, REPS and its operators have used various illegal tactics to circumvent ticket issuers’ security measures in order to exceed ticket limits set by the ticket issuers. REPS purchased more than eight tickets for at least 83,500 events, many of which were in high demand and likely to sell out. REPS spent more than $1.3 billion to amass more than 18.5 million tickets for these events, generating at least $120.8 million in profits by reselling those tickets on the secondary market. For example, REPS generated $833,000 in profits by using 1,300 accounts to purchase 7,624 tickets for a single Beyonce Renaissance Tour concert in Kansas City, Missouri, in 2023, according to the complaint.
“REPS’s entire business model is to attempt to circumvent the ticket purchasing system in order to obtain as many tickets as possible to resell at inflated prices to consumers,” said Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection. “Companies that seek to profit by raising prices or depriving ordinary fans of access to reasonably priced tickets to their favorite shows or events should be informed that we are watching and will take action to stop this illegal conduct.”
Ticket issuers such as Ticketmaster and AXS have implemented measures to prevent resellers from violating ticket purchase limits for popular events. These security measures include ticket quantity selectors capped at the ticket purchase limit and monitoring whether purchases are associated with verifiable accounts and unique credit cards, email addresses, phone numbers and IP addresses, according to the complaint.
The complaint alleges that REPS uses a team of employees, most of whom are based in the Philippines, who use illegal methods to circumvent Ticketmaster and other security measures of ticket issuers’ accounts. These illegal methods include the use of thousands of ticket purchase accounts created with names, addresses or phone numbers belonging to someone other than the ticket purchaser and virtual credit card accounts and phone numbers controlled by REPS. Additionally, they also used IP proxy services and multi-session browsers that mask the account user’s identity and location, the complaint claims.
For example, REPS entered into agreements with its employees and third-party partners allowing the company to use their names and addresses to establish accounts with ticket issuers to create multiple accounts used to facilitate ticket purchases, according to the complaint.
When ticket issuers detect attempts to circumvent ticket limits, they often block or cancel the ticket purchase. In response, REPS developed strategies to help its employees circumvent these ticket limit controls, such as making slight changes to an account holder’s address or name, the complaint alleges. In fact, internal company documents show that REPS officials discussed tactics to ensure their accounts would not be blocked by ticket issuers.
The Commission’s vote to refer the complaint to the DOJ for filing was 2-0. The Justice Department filed suit on behalf of the Commission in U.S. District Court. for the Southern District of California.
NOTE: The Commission refers a civil penalty complaint to the DOJ when it has “reason to believe” that the named defendants are violating or are about to violate the law and that a proceeding is in the public interest. The matter will be decided by the court.
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