A new bill proposed by the Lamont administration would require all secondary ticket sellers, as well as food-delivery vendors, to disclose the full price of their products at the outset of an interaction with a consumer.
The bill, Senate Bill 15, is one of three similar bills that would require secondary ticket sites and food delivery apps to disclose the all-in price (AIP) at a much earlier stage than before a customer is about to checkout. That would eliminate the hidden cost of “junk fees” to protect consumers from additional costs.
SB 15 was unanimously approved by the General Law Committee last week and forwarded on for possible action in the House and Senate.
Junk fees and surcharges, Attorney General William Tong said during a news conference with Gov. Ned Lamont at The Bushnell Center for the Performing Arts on Thursday, are similar to unlawful credit card fees at restaurants, and will be classified as such – through the legislation – under the Connecticut Unfair Trade Practices Act (CUTPA).
“This is scam-like,” Tong said, adding that a similar bill proposed by his office – SB 201 – would close loopholes regarding the timing of when an AIP is disclosed. Often, Tong said, it is already too late when a consumer learns of the full price they will be paying. Decisions have been made, and Tong said that is how companies catch consumers – when they’re vulnerable.
“What is a junk fee?” Lamont said. “That’s when they don’t tell you what it’s going to cost you. That’s when they slip it in at the very last moment. That’s when you’re all the way through the transaction and you realize they’ve added $30, $50, $100.”
Tong said that under the amendment to CUTPA, violators would be charged and penalized on a per-violation basis, and that there would be “heavy financial penalties” – but that it would have to take place in a legal capacity.
“It would have to be a lawsuit,” he said.
There are many similarities between SB 3 (which is sponsored by Senate President Martin Looney and Senate Majority Leader Bob Duff), SB 15 (the governor’s bill), and SB 201 (proposed by the AG’s office). SB 3 contains a plethora of parts concerning consumer protections, while 15 and 201 are more specifically aimed at regulating transaction fees.
Asked if those bills would be merged or consolidated in some way during the remainder of the session, Lamont said it was too early to say.
“I think we’re in a good place,” the governor said.
Ticket sites TicketNetwork and StubHub submitted testimony for a hearing on SB 15 in February, and said they supported the intent of the legislation.
Kevin Callahan, StubHub’s Head of North America Government Relations, said in his written testimony that the company is in favor of the legislation because it would level the playing field for all ticket sellers. He said that StubHub made its own voluntary effort at providing AIP for its customers earlier in the process.
“Consequently, StubHub’s voluntary implementation of AIP resulted in a significant traffic shift away from StubHub and toward other platforms that did not adopt AIP,” Callahan said.
As a result, Callahan said StubHub is in favor of a federal solution but also welcomes Connecticut as a regulatory leader in the space.
Bruce Morris, Director of Government Affairs for South Windsor-based TicketNetwork, supported the spirit of SB 15 as well – for attempting to close a loophole by requiring all-in pricing from the moment the ticket is first advertised.
But he also requested an amendment in written testimony based on the reality of “dynamic pricing,” which is the practice of increasing the price of a ticket, for example, when the seller’s system tracks high demand.
“Our issue is with the overly broad potential interpretation of ‘advertised’ in line 40,” Morris said, adding that it would be “effectively impossible” to publish a range of face value prices before tickets go on sale “due to the dynamic nature of ticket pricing on both primary and secondary platforms.”
He said SB 15’s scope “should be limited to the website where tickets are to be purchased. Changing the language to indicate that the true ticket price ‘shall be displayed in the ticket listing prior to the ticket being selected for purchase,’ – mirroring language regarding price disclosure in New York – would close the ‘loophole’ in the current law without undesired or unintended consequences.”
Christina Kennedy, New England Government Relations Manager for DoorDash, also submitted testimony, but in opposition of the bill.
Kennedy said that companies like DoorDash are already disclosing their fees, such as those charged for delivery that vary upon the customer’s distance from the merchant, early in the process.
“We operate in a hyper-competitive industry that provides consumers with numerous alternatives, empowering them to choose services based on fee structures that make sense to them,” Kennedy said. “Consumers also go through the ordering process very quickly on our platform and can easily abandon an order if they encounter a fee they do not feel is fair.”
