Online Ticketing Fraud: Challenges & Opportunities
11 Apr 2017
Buying and selling tickets online is a tricky business. Customers often worry about whether they’re paying for a real ticket or a fake one, whether that barcode is going to work on game day, and whether they’re overpaying for those Lakers tickets. Sellers have a lot to worry about, too: if they don’t balance quick turnaround times with a secure system that doesn’t invite fraudsters, they put their reputation and business on the line.
But what does fraud look like in the ticketing industry? And how can buyers and sellers ensure a smoother experience for everyone?
The speeding ticket: A growing industry…with growing fraud
Revenue from online ticket sales is growing at a dizzying rate: over 3% each year. Live Nation Entertainment credits much of its record-breaking $7.2 billion revenue in 2015 to an aggressive push to sell tickets online.
But as more and more concert-goers turn to the internet to make ticket purchases, scammers are getting in on the action, too. During March Madness and summer concert season, ticket prices go up as demand increases. With a sharp rise in prices, customers turn to sites like Craigslist and eBay for secondhand tickets. In fact, the Better Business Bureau reports an influx of traffic on these sites every year.
Depending on the price of the ticket, though, between 3% and 20% of secondhand tickets aren’t real. Fraudsters send fake barcodes or phony tickets designed to look like the real thing — or nothing at all. Instead of manufacturing fake tickets, some fraudsters send an email with “a link to the tickets”; but upon clicking on the link, the victim falls prey to a phishing scam. Other scammers simply demand that their victims wire money, and offer nothing in return.
What are the risk factors?
Fraud analysts and businesses have seen two patterns in ticket fraud. In general, fraudsters tend to target more expensive items – and this holds true for tickets. The higher the price of a ticket, the higher the likelihood that the ticket isn’t real. As many as one in four secondhand tickets priced over $200 is fake. These costly, fraudulent purchases often mean frustrated customers and devastating loss for businesses.
Scammers also tend to sell fraudulent tickets close to the event. The logic is simple: customers grow more excited about the event (and more desperate for a ticket!) as the event gets closer and they find out all their friends are going. Fraudsters prey on people who want a last-minute seat at the Kanye concert and are willing to pay exorbitant prices, click on suspicious links, or wire money without stopping to think.
Challenges for businesses and fraud analysts
Detecting and stopping ticketing fraud is difficult. Customers who buy expensive tickets online often expect a digital ticket within minutes or seconds. If analysts detect fraud only after the fact, the business or seller risks damaging their reputation and costing the customer hundreds or thousands of dollars.
But it doesn’t have to be difficult. SeatGeek, a game-changing app that lets customers to search for, find, and purchase tickets worldwide, saves over $600,000 in chargebacks every thirty days. What’s their secret? Sift Science highlights signals indicating when a user is legitimate, meaning their fraud teams can quickly target bad customers while rewarding good ones.
Sift Science can be customized to your ticketing business, taking in data such as event type, venue, team name, and more in order to uncover your company’s unique fraud patterns. Interested in your own ticketing fraud prevention solution? Start catching fraudsters today!