SALT LAKE CITY — MoviePass CEO Mitch Lowe recently explained why a small percentage of subscribers were terminated this month.
Earlier this month, a number of subscribers opened their emails to find that the subscription service — which gives users a movie ticket every day in a month for a low fee of about $10 per month — had terminated their account, according to the San Jose Mercury News.
Users spent hours trying to figure out what went wrong. Some discovered that they had violated the terms and conditions.
Lowe told Business Insider in an exclusive interview that a number of users would check in for a basic 2D film, but then buy an IMAX or 3D ticket. In other cases, users would buy movie theater gift cards or concessions.
Those charges cost MoviePass a lot of money, he said.
As the Deseret News explained, MoviePass sends subscribers a debit card that allows them to pay for any given movie ticket on any day.
Lowe said the company will upload more than just the amount of a ticket price because theaters can sometimes change their prices.
"We're trying to run a business, we offer a great service at an amazing value, and you have a small percentage of people who are taking advantage of us to the detriment of our customers who are enjoying the service," Lowe told Business Insider.
Lowe said MoviePass sent out a warning email to customers that their accounts would be terminated.
According to ABC-15 Arizona, MoviePass sent out a statement that said the company will review terminations on a case-by-case basis.
The statement said:
"A small percentage of MoviePass users were removed from the system, due to violating the terms of service. We diligently review card transactions to prevent fraudulent activity and take our Terms of Service agreement very seriously. If individuals abuse the service, we must take action so that our model continues to be sustainable for everyone. If customers do feel there has been a mistake, they should feel free to reach out to MoviePass customer service via the phone number on the back of their card. We are diligently reviewing all complaints on a case-by-case basis."
MoviePass’ controversy comes during the same week that it has filed a patent infringement lawsuit against Sinemia, saying that the rival subscription service stole a lot of its ideas, Variety reported.
Both services allow customers to see movies for lower fees. MoviePass argues that Sinemia’s app and debit card infringe on copyright.