A $5M lawsuit was filed against StubHub over their updated refund policy
One man is reportedly suing the ticket resale company StubHub for $5 million in a class-action lawsuit.
The reason for the lawsuit is the Wisconsin man purchased tickets to an NHL game before the coronavirus pandemic postponed the season. He's now suing StubHub for refusing to refund the money he spent on the postponed NHL game.
According to Billboard, Matthew McMillan filed the lawsuit in U.S. District Court in Wisconsin on April 2. McMillan accuses StubHub of several things, mainly breach of contract and negligent misrepresentation.
The news comes just over a week after ticket resale sites began requesting corporate bailouts. The reasoning is due to the financial impact form coronavirus.
With the complete shutdown of large gatherings, countless businesses are being impacted. Entertainment industries have seen every event canceled or postponed for a foreseeable future.
Ticket buyers have been flooding StubHub with refund requests since the official pandemic announcement came a few weeks back. The company reportedly doesn’t have enough liquidity to honour these requests though. They were processing refunds for canceled events just like they previously did but then changed their policy. The new policy offerers a coupon.
McMillan's main agenda is for the court to demand StubHub to cease issuing coupons worth 120% of the paid ticket value. StubHub is doing this as opposed to providing full refunds for canceled events.
According to the filing, McMillan purchased two tickets to an NHL game in early March. The NHL postponed its season on March 12 in the massive wave of coronavirus shutdowns. McMillan then asked StubHub to refund his money. He was promptly told no because the game was not technically canceled, only postponed.
McMillian purchased the ticket with StubHub's money-back guarantee policy, FanProtect guarantee. He also is very certain that the game is sure to be canceled.
McMillan states that StubHub told him that he would receive the coupon in lieu of a monetary refund. The coupon, of course, expired in 12 months. It was also worth 120% of the original order price.
McMillan cites StubHub's FanProtect guarantee is a misrepresentation. It promises a full money back refund in the case of a canceled event.
The lawsuit also notes that StubHub president Singh Cassidy sent out an email on March 12, saying that refunds would still be available. But, as an alternative, the 120% off coupons were also available.
Less than two weeks later, StubHub amended its policy. It stated, “if the event is canceled and not rescheduled, you will get a refund or credit to use on a future purchase, as determined in StubHub’s sold discretion (unless a refund is required by law).”
On March 20, Cassidy sent a new email. It said the coupon would now be the "standard policy for canceled events, with refunds available in jurisdictions where they are required."
Singh says the reasoning is the financial impact from coronavirus.
“We are facing significant timing delays in recouping funds from the thousands of sellers on our platform, and expect these challenges to continue in the coming months," Cassidy wrote. "The new policy stated customers would be offered a 120% credit for canceled purchases as a “thank you for remaining patient in a very challenging period.”
McMillan challenges the policy change, saying StubHub did not act fiscally responsible.
“Instead of instituting responsible financial transaction policies, (StubHub) made it their practice to pay ticket sellers before the event had occurred, exposing themselves to the possibility that they would be left holding the bag (or have to ignore their own guarantee and cheat their customers) if an event was cancelled and they could not promptly collect from sellers."
McMillan lawyer Nick Coulson echoed the sentiment.
“Dumping promised refunds for expiring coupons during the time of greatest financial suffering in recent history is cruel and wrong,” Coulson tells Billboard. “Especially because people have no idea if they'll even be able to use the coupons — we don't know what the next 12 months are going to look like. To the extent that StubHub claims financial constraints have forced its hand (into its customers' pockets), those constraints are entirely of its own making. Through this action, we hope to provide people some small bit of relief during this uncertain time.”
StubHub has stated that they will provide no comment on pending litigation.
See more: 30 albums turning 10 in 2019