When an executive warned that the method would attract the attention of federal regulators and state attorneys general, Mr. Lowe replied in writing “OK, I get it,” to recommended the company try it with “our highest volume 2 percent of users,” says.
In a separate effort, the company asked the 20% of its most frequent subscribers, about 450,000, to submit photos of their actual movie tickets for approval through the app, saying they’ve been ” randomly selected” for the program. , the FTC said. The FTC said those who fail to submit the correct ticket multiple times will have their accounts canceled.
Automated verification systems typically don’t work on popular mobile operating systems, and the software cannot recognize many user-submitted photos, the FTC said. The program blocked thousands of people from using the service, the FTC said.
Lowe personally selected the number of people who would be asked to submit photos, the FTC said.
The FTC says trip wires are typically booked on users who watch more than three movies per month. Mr. Lowe has set thresholds, it said.
Additionally, a previously reported 2019 data breach exposed personal and financial information, including credit card numbers, of more than 28,000 customers, the FTC said.
After having three million subscribers – far more than executives expected – the company has been struggling forever to raise enough cash to cover its costs. In April 2018, the company revealed to regulators that it had been losing about $20 million a month for several months. In July 2018, the company took out a $5 million loan after saying it couldn’t pay its bills and experienced service disruptions, but the company insists its service is stable.