Terms of Service Law: Was MoviePass’ Recent Account Purge Legal?

Some MoviePass users, to blurt it out bluntly, are p*ssed! The fashionable film app brought the hammer down on “a small percentage” of accounts accused of “violating MoviePass’ terms of service.” Now people are wondering: Was the purge legally sound?

The MoviePass Purge: Terms of Service Violations?

Here’s an excerpt from the MoviePass breakup letter:

“Your account has been canceled effective immediately for violating the terms of service by using your MoviePass card to purchase part of a premium ticket. You cannot sign back up for MoviePass.”(http://www.businessinsider.com/moviepass-terminated-users-for-violating-terms-of-service-premium-tickets-2018-2)

Shocked and confused, users swarmed on social media, demanding answers about their terminated accounts.  In response, MoviePass claimed that affected parties purchased parts of “premium tickets” with their passes, which is against the Terms of Service. For their part, many affected parties insist they’re innocent of such shenanigans.

Ted Farnsworth is the Chief Executive of Helios & Matheson Analytics, the majority owners of MoviePass.  He asseverated that hundreds of canceled accounts violated the company’s terms of service — which amounted to fraud.

“The thing is, with the size we’re getting to now we have to crack down or these people will ruin it for everybody,” cautioned Farnsworth. “I mean, we’ve been out to theaters in [New York City] and watched people do it.”

He also accused some account holders of misappropriating MoviePass cards to purchase gift cards, resell tickets, and facilitate cash-back scams.

MoviePass Account Kerfuffle: A Growing Pain?

In an interview, Farnsworth explained that the company just started focusing on the issue.  MoviePass has grown rapidly, recently surpassing the 2 million subscriber mark. Its meteoric rise has some people hypothesizing: “Who knows; maybe the rush to expand spawned some unforced errors.”

Farnsworth went on to say “A lot of times the theaters will call us to let us know when they think someone’s committed fraud, too — especially the independents.  You don’t want to cut anyone off unless you have to,” he said. “And, trust me, we don’t want to cut anyone off.”

Was The MoviePass Account Purge Legal?

Was the MoviePass account purge legal? In all likelihood, yes.

Let’s take a look at MoviePass’ terms of service. Section 2.18 begins:

“2.18. You agree that MoviePass may, at its sole discretion and without prior notice, suspend your subscription or terminate your Account and MoviePass Card on a temporary or permanent basis, and block your access to the Site at their sole discretion if:”

It then goes on to list a bunch of no-nos, like missed payments, card sharing, and multi-account creation (to name just a few). But it also includes language like:

“[MoviePass can cancel your account if it] suspects that you provided incorrect or false information to MoviePass when creating an Account or signing up for a subscription.”

In addition to:

 “[MoviePass can cancel your account if it] If you use your MoviePass Card for any purpose other than to purchase a 2D movie ticket at a theater kiosk for the movie you check into, or we have reason to believe that you have done so.”

“Suspect” and “reason to believe” are the standout phrases, and go a long way in providing MoviePass a liability shield.

Reminder: Many of the free terms of service templates found online  are written with only consumers’ interests in mind and don’t include subtle, business-protecting language. Now, that’s not to say that businesses don’t care about customers; however, the best terms of service agreements benefit both parties. And terms of service lawyers are masters at striking that balance.

Connect With A Terms of Service Lawyer

Terms of service agreements are essential. Don’t jeopardize your business by using free online templates or DIY options. Besides, working with a terms of service attorney can cost about the same as a DIY service. However, the knowledge and guidance you’ll get from a dedicated, personal lawyer will prove priceless. Give your business the foundation it needs by working with an experienced terms of service lawyer who will guide you down the best possible path.

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