Two ‘ticket touts’ who fraudulently resold event tickets have been ordered to pay back £6,167,522.02 at a hearing at Leeds Crown Court today. The confiscation order was handed down at the latest hearing associated with the UK’s first successful prosecutions and convictions against a company fraudulently reselling tickets on a large scale.
Peter Hunter, aged 53, and David Thomas Smith, aged 68, were prosecuted and sentenced in February 2020 following an investigation by the National Trading Standards eCrime Team, which is hosted by North Yorkshire County Council and City of York Council. The pair ran BZZ Limited, a multi-million pound limited company which they used to purchase and resell hundreds of tickets at inflated prices for events and concerts such as Ed Sheeran, Harry Potter and the Cursed Child (the play), Madness, McBusted and other mainstream acts.
Today’s landmark confiscation order follows a lengthy investigation by National Trading Standards and a complex and extensive financial investigation conducted by the Yorkshire and Humber Regional Economic Crime Unit (RECU). Smith and Hunter were found to have benefited from their crimes by a total of £8,750,732.00. They have been given three months to pay back the £6,167,522.02 and face an additional eight years’ imprisonment should they fail to pay.
More background on the case and sentences is provided below.
Ruth Andrews, Regional Investigations and eCrime Manager, National Trading Standards, said:
“Today’s result concludes a landmark case that demonstrates once and for all that dishonestly buying large quantities of tickets and reselling them at inflated prices is an unacceptable, illegal and fraudulent practice.
“All too often fans looking to buy tickets to sport events, music concerts and other high-profile events find that official tickets sell out in minutes before reappearing on secondary ticketing sites at vastly inflated prices. This can have a significant financial impact on consumers and I hope this ground-breaking case helps drive long-term changes in the secondary ticketing market.
“The defendants have learnt again today that crime does not pay and their futures have been irrevocably damaged by their criminal behaviour as a result. We hope this sends a message to all those who choose to engage in fraud that there are severe consequences.”
Cllr Denise Craghill, Executive Member for Safer Communities at City of York Council, said:
"I would like to commend the partnership working in this case and the diligent and thorough work undertaken by the Financial Investigator from the Yorkshire and Humber Regional Economic Crime Unit in this lengthy and complex case. Together with our digital investigators here at City of York Council, this case has now been brought to a successful conclusion and the assets removed from these defendants will provide valuable resources in our continued fight against online fraud.”
Cllr Derek Bastiman, North Yorkshire County Council said:
“While it is important that Smith and Hunter do not profit from their crimes, today’s proceeds of crime award will be used by our e-crime team to catch more scammers. Awards like these are never the aim of such investigations, but are a means of continuing them.”
Mrs. Ramona Senior, Unit Head for the RECU said;
“Illegal and organised Ticket Touting can be extremely lucrative as the sheer size of these orders demonstrate. It creates demand where one might otherwise not exist, driving the public into the hands of the secondary market and forcing them to pay significantly inflated prices. Today’s orders indicate that those making large profits from an illegal activity can expect the full weight of the law to be applied to them”.
Background to the case
Mr Hunter and Mr Smith used dishonest and fraudulent tactics to purchase multiple tickets from primary ticket sellers such as Ticketmaster, Eventim and AXS. This meant that BZZ Limited was dishonestly and fraudulently competing with consumers to purchase tickets from the websites of primary sellers while, at the same time, listing those tickets for sale to consumers at inflated prices.
To evade the platforms’ systems, the defendants:
- Used different people to buy tickets
- Applied other people’s personal details to purchase tickets
- Deployed at least 97 different names, 88 postal addresses and more than 290 email addresses to evade platform restrictions. These identities were enhanced through the use of bots, which are designed to support the automated bulk-buying of tickets. Emails to the 290+ email addresses were all auto-forwarded to one email address held by BZZ Limited
- Used different IP addresses and concealed their IP address – their internet identity – to disguise bulk buying.
The defendants also engaged in fraudulent trading by listing tickets for sale on secondary ticketing websites that they had not purchased and did not own. Known as ‘speculative selling’ or ‘spec selling’, the idea was to induce consumers to agree to ‘buy’ non-existent tickets at an inflated price. Once sales had been secured, the defendants would try to source the tickets to fulfil the purchase. Consumers were therefore tricked into paying an inflated price and also exposed to the risk that BZZ Limited would be unable or unwilling to supply the ticket.
The company’s tactics circumvented the platforms’ terms and conditions and their automated systems to block multiple purchases. This saw them purchase more than 750 Ed Sheeran tickets in 2017. Despite knowing that their purchases had contravened the primary sellers’ terms and conditions – making tickets liable to be cancelled – the defendants knowingly continued to resell hundreds of tickets to consumers at inflated prices.
Mr Hunter and Mr Smith committed their offences between May 2010 and December 2017 and they made a net profit of £3.5 million in the last 32 months of the fraud. Their actions meant thousands of people were denied the opportunity to purchase tickets at face value, while others were sold invalid and overpriced tickets.
The pair were sentenced in February 2020 on four counts:
- Count 1: Fraudulent trading – namely by knowingly enabling BZZ Limited to purchase event tickets for resale (Mr Hunter sentenced to four years, Mr Smith to 30 months)
- Count 2: Possession or control of an article for use in fraud – including the use of bots and debit/credit card payments held in the names of people other than BZZ Limited (Mr Hunter sentenced to 12 months, Mr Smith to 12 months – to be served concurrently with Count 1)
- Count 3: Fraudulent trading – based on continuing the business of BZZ Limited for a fraudulent purpose between 19 May 2010 and 13 December 2017, namely by offering for resale tickets which were at risk of being refused entry and/or falsely representing that said event tickets offered for resale were valid (Mr Hunter sentenced to two years and Mr Smith sentenced to two years – to be served concurrently)
- Count 4: Fraudulent trading – by listing and offering event tickets on secondary ticket websites that they did not own, and/or falsely representing that BZZ Limited did own the said event tickets (Mr Hunter sentenced to 18 months, Mr Smith to 18 months – to be served concurrently)
Hunter and Smith appealed their convictions on all counts. These appeals were rejected by the Court of Appeal in November 2021.
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About National Trading Standards
National Trading Standards delivers national and regional consumer protection enforcement. Its Board is made up of senior and experienced heads of local government trading standards from around England and Wales with an independent Chair. Its purpose is to protect consumers and safeguard legitimate businesses by tackling serious national and regional consumer protection issues and organised criminality and by providing a “safety net” to limit unsafe consumer goods entering the UK and protecting food supplies by ensuring the animal feed chain is safe.