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(Photo via MoviePass / Facebook)
Almost two years after the shutdown, the MoviePass subscription service this week struck a deal with the Federal Trade Commission over allegations the platform blocked subscribers’ access and failed to secure their subscribers. personal data.
The mobile app reached an impressive customer base of over 3 million users in 2017, promising an all-you-can-eat movie buffet for less than $ 10 per month. However, the business model ultimately proved unsustainable, forcing MoviePass to cut costs. According to the FTC complaint (PDF), MoviePass, along with parent company Helios and Matheson Analytics and their directors Mitchell Lowe and Theodore Farnsworth, “deceptively” marketed its service through a trio of nefarious tactics.
The first tactic saw operators invalidate subscriber passwords “while falsely claiming to have detected“ suspicious activity or potential fraud. ”But changing a password is easy enough, so the company launched a program. ticket verification “to discourage use of the service”.
This approach, as described by the FTC, required users to submit photos of their physical movie ticket stubs for approval through the app within a certain time frame. If you do not do this, you lose the viewing rights and possibly your subscription. “The program has blocked thousands of subscribers from using the service due to issues with the verification system,” the agency said.
MoviePass also reportedly used “trigger threads” to block certain groups of users, typically those who watched more than three movies per month, after reaching certain undisclosed thresholds.
“MoviePass and its executives went to great lengths to deny consumers access to the service they paid for while failing to secure their personal information,” said Daniel Kaufman, acting director of the Office of Consumer Protection of the FTC, in a statement. “The FTC will continue to work to protect consumers from deception and to make sure businesses keep their promises.”
The official complaint also describes violations of the Restoring the Confidence of Online Buyers Act (ROSCA), which requires businesses to be honest with consumers when marketing negative options (like subscriptions) on the internet. . And MoviePass has failed to “take reasonable steps to secure personal information collected from subscribers,” including names, email addresses, dates of birth, credit card numbers and geolocation information.
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Under the proposed regulation, MoviePass and all affiliated companies and executives will not be able to “distort their business and data security practices” and will be required to “implement comprehensive information security programs”.
The company closed its mobile ticketing service in September 2019; Helios and Matheson Analytics then filed for Chapter 7 bankruptcy and announced that they were ceasing all business activities at the end of January 2020.
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