When a senior executive warned that the practice would attract the attention of federal regulators and attorneys general, Mr. Lowe replied in writing, “OK, I see,” suggesting that the company do it with “2 percent of our highest volume users “The FTC. try said.
Let us help you protect your digital life
In a separate effort, the company required around 450,000 people of the 20 percent of subscribers who used the service most frequently to submit photos of their physical movie tickets for approval through the app and inform them that they were “randomly” selected for the program, said the FTC. Those who failed to properly submit the tickets more than once would void their accounts, the FTC said.
The automated verification system often did not work on popular mobile operating systems, and the software failed to recognize many user-submitted photos, the FTC said. The FTC said the program prevented thousands of people from using the service.
Mr Lowe personally selected how many people were needed to submit photos, the FTC said.
The tripwire was usually placed on users who attended more than three films a month, the FTC said. Mr. Lowe set the thresholds, it said.
In addition, a previously reported data breach in 2019 disclosed the personal and financial information, including credit card numbers, of more than 28,000 customers, the FTC said.
After three million people signed up – a lot more than executives expected – the company was struggling to raise enough cash to offset the cost. In April 2018, the company announced to regulators that it has been losing about $ 20 million a month for several months. In July 2018, it raised $ 5 million after saying it couldn’t pay its bills and experienced a service interruption, but the company insisted that its service remain stable.