Early Warnings of Ticket Scams Said Ignored by IOC

9/5/2008

On July 22, when the IOC and the USOC first filed a lawsuit attempting to shut down a handful of websites accused of scamming Olympics ticket buyers, they claimed they did so in part to protect consumers. Unfortunately, the end of July was far too late to help most of those who had been taken advantage of by the scam websites. The opening of the Summer Olympics was a little more than two weeks away, and getting replacement tickets at that late date was difficult at best, impossible at worst. When asked why they had waited so long to deal with the ticketing sites, some Olympics officials responded that they had learned of the alleged scam websites only recently, and besides, they had to wait to see if the ticket offers were, in fact, false, something they couldn’t know for sure until they were positive no tickets would be delivered.

As it happened, the nature of the Olympic committees’ lawsuit tended to undercut that last argument. Their complaint asked that the websites be shut down primarily because they were misusing trademarks that belonged exclusively to the Olympics, trademarks that included, among other things, the “word marks” Olympic and Beijing 2008. The problem of not actually providing the tickets promised was mentioned, but more as an add-on to the main point of trademark infringement than as a driving concern. And since the alleged scam sites had been taking advantage of the Olympics trademarks from the moment they went up, the question remained why the IOC and USOC had allowed them to operate for half a year or more before moving to close them.

The other arguments, that the committees had only just been made aware of the alleged scam sites, or that they were unsure if the sites were indeed scams, also seemed somewhat questionable. If the IOC and the USOC had been policing their trademark, it’s unlikely they would have missed stories such as the March 9 article in London’s The Observer that outlined in excruciating detail what beijigticketing.com, now the most notorious of the alleged scam sites, was up to. (That story said the British Olympics Association was investigating the sites and working with Chinese authorities to “clamp down on the rogue trade,” a clamp down that, if it actually happened, clearly had little impact.) It’s also unlikely they would have missed the item in the Washington Post that warned ticket buyers to be wary of beijigticketing.com.

Perhaps even more damning is the story of Wei Zhang, a 28-year-old employee of Bank of America in Charlotte, North Carolina, who says he tried to alert Olympics officials to what the alleged scam websites were up to as early as February, only to be ignored. Zhang, whose family moved from China to the United States when he was nine, saw in the Beijing Olympics a chance to catch up with relatives still in China while also watching some world-class sporting events. At first he went to the USOC’s official ticketing site, CoSport, to buy tickets. But, Zhang says, “at that time the system was a lottery, and if you missed out on it, you basically could not get tickets. There wasn’t any announcement of future ticket sales, so I thought they might all be gone soon.” That sent him in search of other websites that might have a ticket inventory, and when he did a Google search, beijingticketing.com popped to the top. He clicked on it, and bought three tickets to the Opening Ceremonies for around $5,200.

Almost immediately, though, Zhang began to feel uneasy. He had purchased plenty of things over the internet before, and never had any problems beyond the occasional slow delivery of a product, but something about beijingticketing.com bothered him. He noticed there was no lock symbol at the bottom when he made his ticket purchase, a symbol that normally suggests safe encryption. That, however, was minor, he decided. Less minor was his discovery that in the terms and conditions information the corporate address was in Phoenix, Arizona, but the phone number was in the United Kingdom. The clincher, however, was when Zhang heard two colleagues of his at work talking about a website that had ripped them off for Led Zeppelin tickets. They had bought expensive tickets for a performance in London, and just before they were set to leave for England they received an e-mail saying the tickets were not available. Apologies were offered, but despite promises of a refund, none was ever received. The name of the site that had scammed his colleagues was Xclusiveticket.com. When he looked closer at the beijingticketing.com website, he noticed it was owned by a company called XL&H — with the X standing for Xclusive.

Zhang turned to Google again, this time to find more information about Xclusive Leisure & Hospitality, or XL&H. What he found was a trail of articles talking about people who had been ripped off by websites owned by the same man behind XL&H and beijingticketing.com. It was enough to convince him that he had been ripped off as well, and to file a fraud claim with his credit card company, which eventually granted him a charge back. Interesting enough, XL&H contested Zhang’s claim of fraud, saying he shouldn’t get his money back. But by then the information Zhang had found out about XL&H was enough to convince his credit card company that he was in the right.

Before that was resolved, however, Zhang decided he needed to let the Beijing Olympic Committee know what was going on. On February 12 he sent them an extensive e-mail outlining all he had learned about beijingticketing.com and the people behind it. He heard nothing in return. He sent a similar e-mail to the fraud office for Metropolitan London, since XL&H seemed based in England, despite its supposed Phoenix address. Zhang also heard nothing from them. He contacted a few reporters, with minimal success, and then finally in early March sent the Beijing Olympic Committee a follow-up e-mail suggesting a “widely publicized web alert letting people know [about the suspicious websites] before it's too late.” Once more, he got no response.

He didn’t contact the USOC, Zhang says, because he thought the officials in Beijing would be the ones most concerned about people showing up with no tickets, and also because he thought they would spread the word. “I always thought that once I alerted the Beijing Olympics Committee they would investigate,” he notes. When he realized he was wrong, he didn’t know what else to do. So he began posting notices online to alert people to the problems with beijingticketing.com, and sat back to watch as the Olympics ticketing scam he’d warned about was allowed to continue.

Zhang himself ended up in Beijing with Olympics tickets he bought from CoSport.com when a second round of tickets was released in late March. So for him the brush with beijingticketing.com was more inconvenient than devastating, as it was for others. Still, he doesn’t know why Olympics officials failed to do anything about the alleged scam sites until late July, more than five months after he had raised the alarm. And if he, working alone, could figure out the scam, surely the Olympics committees, with all their resources, could have done the same, especially after he had provided them a roadmap.

Whether Wei Zhang was alone in trying to push the Olympics committees to take action remains to be seen. When the IOC and USOC filed their July lawsuit, USOC General Counsel Rana Dershowitz noted that the Olympics committees had heard complaints from hundreds of victims in numerous countries, including England, Belgium, and Australia. How early some of those complaints were made, and how quickly the IOC and USOC responded to them, may well be a question worth asking.