In 2017, the startup Moviepass offered film buffs a deal that seemed too good to be true. For $9.95 per month, subscribers could see up to one movie per day at all major theaters located throughout the country. Moviepass hoped to offset the costs of purchasing so many tickets by brokering bulk deals with theater chains and by monetizing users’ data. None of these plans ever came to fruition, however, which left the company with more than three million subscribers who were constantly visiting the box office by summer 2018.
According to a recent investigation by the Federal Trade Commission (FTC), that’s around the time when operations at Moviepass became extremely shady. Faced with millions of dollars in losses each month, executives and staff at the company purposefully sought to make the service difficult to use for their most active customers. In one instance, 75,000 top subscribers had their passwords invalidated as they were falsely informed that “suspicious activity or potential fraud” had been detected with their accounts. Those who tried to reset their passwords often faced technical issues that kept them locked out of Moviepass while others who contacted customer service had to wait weeks for responses.
The company would also suddenly place restrictions on accounts without warning, such as a rule that required the top 20 percent of users to submit photos of their physical movie tickets for approval. “MoviePass and its executives went to great lengths to deny consumers access to the service they paid for while also failing to secure their personal information,” said Daniel Kaufman, acting director of the Bureau of Consumer Protection at the FTC. As part of the settlement between the company and federal investigators, the lead executives of Moviepass are prohibited from misrepresenting their business ventures in the future, any of which must also feature information security programs.
- How did Moviepass prevent its customers from using the service?
- Do you think Moviepass executives received a suitable punishment for their misconduct? Why or why not?