MoviePass Betrayed Users, So They’ll Use It Less, Says FTC

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When an executive warned that the practice would attract the attention of federal regulators and the state attorney general, Mr. Lowe responded in writing. Try it with the FTC. said.

In a separate effort, the company required the 20 percent of customers who used the service the most, about 450,000 people, to submit photos of their physical movie tickets for approval via the app, it explains. That he was “selected at random” for the program, the FTC said. The FTC said those who failed to submit tickets properly more than once would have their accounts canceled.

The FTC said that automated verification systems often did not work on common mobile operating systems, and the software failed to recognize many user-submitted photos. The FTC said the program barred thousands of people from using the service.

Mr. Lowe personally chose how many people would be required to submit photos, the FTC said.

In the third attempt, described by the commission, the company created a “trip wire”, placing a limit on the number of times certain users can use the service, but did not disclose the limit in its advertising or terms of use. Regulators said the company grouped customers based on how often they used the service, then, after the group reached an undisclosed limit, people in the group would be unable to use the service. Users often didn’t know they had been hacked until they got to the theater, hoping to use up their subscription, he said.

The FTC said the trip wire was typically set on users who went to more than three movies per month. Mr. Lowe set the threshold, it said.

Also, a data breach in 2019, which was previously reportedThe FTC said it exposed personal and financial information, including credit card numbers, of more than 28,000 customers.

After three million people signed up—much more than executives expected—the company struggled relentlessly to bring in enough cash to offset the cost. In April 2018, the company told regulators that it had been losing around $20 million per month for several months. In July 2018, it borrowed $5 million After saying it couldn’t pay its bills and experienced service interruptions, the company insisted that its service remain stable.



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