Sonoma County District Attorney Jill Ravitch announced a consumer protection settlement in a civil action against former MoviePass executives Theodore Farnsworth and Mitchell Lowe for engaging in numerous unlawful, unfair, and fraudulent business acts and practices while overseeing the operations of the now-defunct movie theater subscription service. Farnsworth and Lowe will pay $400,000 in civil penalties and cy pres restitution.
MoviePass, Inc. (MoviePass) was an American subscription-based movie ticket service headquartered in New York City. Founded in 2011, the service initially allowed subscribers to purchase up to three movie tickets per month for a discounted monthly fee. In 2017, Helios and Matheson Analytics purchased MoviePass and shifted the business model from a three-movie per month subscription to offering an “unlimited” subscription plan. However, over the course of the next two years, the Defendants changed MoviePass’ business model and terms of service multiple times to the detriment of the consumers.
MoviePass shut down its operations in September of 2019. Both MoviePass and its parent company, Helios and Matheson Analytics, filed for Chapter 7 bankruptcy in January of 2020.
While overseeing the operations of MoviePass, the Defendants engaged in numerous unlawful, unfair, and fraudulent business acts and practices, including:
· Falsely advertising that MoviePass subscriptions offered “unlimited” movie watching when in reality, MoviePass continually added limitations to customers’ subscriptions.
· Unconscionably changing terms of service during a subscription period.
· Converting all prepaid “unlimited” plans to three movies per month.
· Shutting down the availability of movies when a certain dollar amount was reached.
· Failing to notify autorenewal customers of material changes to their subscriptions.
· Continuously charging customers’ debit or credit cards after receiving notice of cancellation from customers
In addition to the above acts and practices, in 2019 MoviePass suffered a data breach and failed to notify the California Attorney General’s Office, as required by law.
Deputy District Attorneys Matt Cheever and Caroline Fowler handled the matter on behalf of the Environmental and Consumer Protection Division (ECLD) of the Sonoma County District Attorney’s Office. Consumers may report false advertising or unfair business practices to ECLD by calling (707) 565-5317 or emailing ECLD@sonoma-county.org.
