The Federal Trade Commission filed a lawsuit on August 18 in the District Court of Maryland against Key Investment Group, a ticket broker in the state. According to the lawsuit, the company engaged in illegal ticket purchasing and reselling which resulted in millions of dollars in profit.
The company bought and resold hundreds of thousands of tickets, violating purchase limits for popular tours like Taylor Swift’s multi-year Eras Tour. Specifically, the suit alleges that Key Investment Group bypassed Ticketmaster‘s security measures. The company also operated under the names Epic Seats, TotalTickets.com LLC, and Totally Tix LLC.
The FTC claimed that, over a year, the Maryland company bought at least 379,776 tickets. Purchased from Ticketmaster, the tickets cost around $57 million. From there, the company resold the tickets through other platforms, raking in around $64 million.
Maryland Ticket Broker Claims FTC Lawsuit “Threatens” the Secondary Ticket Market
Key Investment Group released a statement, per CBS News, that they would “vigorously defend itself against this clear example of regulatory overreach.” According to the company, the FTC “misleadingly characterizes KIG’s use of standard internet browsers,” and that the lawsuit “threatens to dismantle the secondary ticket market for live events.”
In the lawsuit, the FTC laid out how Key Investment Group orchestrated the scheme. Using thousands of Ticketmaster accounts that were blatantly fake or purchased through third party sellers, KIG bypassed security measures.
Additional tactics included using thousands of credit card numbers, virtual card numbers, “spoofed” IP addresses which hide the account identity, and SIM technology. The company would collect the incoming verification codes using SIM tech, allowing them to bypass Ticketmaster’s purchase limits, according to the CBS News report.
Specifically, KIG violated the FTC Act and the Better Online Ticket Sales Act. Through these acts, individuals and companies are prohibited from “circumventing a security measure, access control system, or other technological control or measure on an internet website or online service that is used by the ticket issuer to enforce posted event ticket limits or to maintain the integrity of posted online ticket purchasing order rules.”
Photo by Leigh Vogel/Getty Images for Ian Madrigal
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