MoviePass promised unlimited movie tickets for $9.95 a month, but the result was altogether different. Executives made it very difficult for people to actually use the service, forcing password resets, installing surprise limits on accounts, and exposing personal data, according to the FTC. "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," Daniel Kaufman, acting director of the Bureau of Consumer Protection, said Monday as MoviePass agreed to a settlement. It bars MoviePass, parent company Helios and Matheson Analytics, and top executives Mitchell Lowe and Theodore Farnsworth, from misrepresenting their business and data security practices, while all future businesses will require comprehensive information security programs, per the Verge.
Launched in 2011, MoviePass gained more than 3 million subscribers—far more than expected—during a 2017 promotion offering "any movie, any theater, any day" for $9.95 a month. As the plan to negotiate bulk prices from theaters never panned out, the troubled company—which was losing $20 million a month by April 2018, per the New York Times—cut costs in by putting surprise limits on users who went to more than three movies per month, the FTC said. Meanwhile, its 450,000 most active users were told they were "randomly selected" to submit photos of their movie tickets. But users who failed to properly submit photos twice had their accounts canceled, the FTC said. Claiming "potential fraud," the company also forced password resets for 75,000 users, many of whom faced technical issues and were stonewalled after complaining, the FTC said. (MoviePass and its parent company declared bankruptcy last year.)