Movie fans went to a movie theater using a mobile phone app and chose a movie and a screening. The cost of the ticket was charged by MoviePass to a prepaid debit card, which was used to pay for admission to the film.
According to prosecutors, the business model switched to an “unlimited” subscription plan at $ 9.95 per month and an “unlimited” annual subscription price when Helios and Matheson Analytics purchased MoviePass in 2017.
But over the next two years, the business model and terms of service changed at least a few times and would have negatively affected customers, prosecutors said.
Among the alleged illegal, unfair and fraudulent acts and practices of Farnsworth and Lowe was false advertising. The couple said the service offers “unlimited” viewing of films consisting of “any movie” “any day” at “any theater”. But prosecutors allege MoviePass added limitations to subscriptions.
The couple also reportedly changed the terms of service during a subscription period, converted all “unlimited” prepaid plans to a limit of three movies per month and, among other things, continued to bill customers after canceling their subscriptions.
Additionally, prosecutors said MoviePass suffered a data breach in 2019 that affected at least 58,000 consumers. A company engineer had created an insecure, unencrypted server for debugging, prosecutors said.
The server contained more than 161 million pieces of information, such as names, MoviePass card numbers and credit card numbers, prosecutors said.
MoviePass also reportedly failed to notify the California attorney general’s office of the violation, as required by law.
MoviePass ceased operations in September 2019, and Helios and Matheson Analytics filed for Chapter 7 bankruptcy in January 2020, prosecutors said.
Contra Costa County prosecutors became involved after a resident in 2018 filed a complaint against MoviePass with the state attorney general’s office.
The resident alleged in the complaint that even though he had paid for “unlimited” movies, the MoviePass app only showed a limited number of movies and did not show available tickets.
State prosecutors sent the complaint to Contra Costa County for investigation.