5. Fraud and Terminated Users
How many users were terminated this month for fraud?
Oguz: As a private company, we don’t disclose our user numbers, which [public companies like Cinemark and MoviePass] have to, and we are keeping our user numbers to ourselves, and we actually told the percentage.
When it was announced that it was less than one percent, an enormous amount of people came forward complaining that they had been wrongly exited, and that number then went to “approximately three percent.” I’m wondering if you could, at the very least, put some kind of hard number on this because to be frank, that’s a little vague.
Oguz: We’re not gonna put any hard number on it, Chris.
Fair enough. Did you conduct the fraud search internally? Who conducted the investigation?
Oguz: Yeah, we are always doing that internal, of course. We have a fraud team.
I saw your press release about fraud. Fraud is very serious. I don’t mean to undermine that, and certainly even people just buying tickets for friends that is something that is a danger to your business and you have to take that seriously. I just want you to know that you’ve been heard on that, and I’m just taking it as accepted truth, so I want to move past that. Is there a chance in your mind that some people got caught up in this investigation who have been falsely accused of fraud? Is that possible?
Oguz: That’s a good question. That’s a good question. That is actually, I can tell you this, that there is of course and, well, I can’t say that… There’s a high reason of fraud. Let’s say that you change your device because you have 10 devices, [if] you’re changing it and we canceled your account because [we] actually think that you’re selling it, that’s not fraud. But think about when you just bought a ticket, and [then] go and forget about it. There’s reasons that people might not [commit] fraud, but that’s a violation of our terms.
I guess this gets into the issue of what you guys categorized as misuse of a card. That got folded into this, is that correct?
Oguz: Come again, sorry?
If someone misused a card, not fraud – fraud meaning someone intentionally manipulated the service – if someone misused the service, it is possible they got folded into this fraud search, right?
Oguz: Yes, yes.
Here’s my problem, if people are having trouble using this service, and I’ll be honest with you, it’s complicated, you got to get used to it. I have misused the service, I made mistakes in the beginning. This with the combination of there being a lack of customer support when there’s a problem and genuine misuse, why are you not open to at least having that person having a conversation with your company about misuse, or making their case?
Oguz: We’re actually open to that. We are having those conversations, with our support team, we’re trying to address that question. We actually recently reinstated some accounts.
You understand support is telling customers right now, “The conversation is over.” That’s the language being–
Oguz: I know, the conversation’s over. I think it’s in some cases, but maybe you’re talking about the misuse, that’s why I’m talking like this. The forgetting about check in, that’s something we always have a conversation with [customers], there’s a misuse fee for it. We don’t always cancel you, because you just forget to check in, and there’s some conversation.
What would you tell an honest user who got caught up in this? Right now, that user does not know what to do? They’re being told by your company the conversation’s over, you’re gone, fill out your refund form. What would you tell my reader that feels that they’ve been cut out of this system, they’ve been accused of fraud and they did not commit fraud. What would you tell them to do?
Oguz: Well, everything that actually we’ve sent to the users, that’s a process that we are doing–
What you sent users is that conversation is over. You’re telling me the conversation is not over?
Oguz: No, no, no, in the misuse of check ins. I’m not saying that the conversation is over in every case. I was talking about the misuse case. You said that you’ve misused the card, I can tell you that we want to care [for] our customers, and we always listen. We can of course try to do more, but right now, we need to fight the frauds to actually maintain the business.
Sure. I’m not unsympathetic.
Oguz: Our competitors said they were at 20 percent misuse of service, now they are liable. [Editor’s Note: Oguz multiple times makes reference to MoviePass’ claim that 20 percent of users misused their service and all their customers suffered as a result.]
Oguz: On the other hand, we are giving full reasons and full refund of what you paid in the transaction left.
Sir, you are not giving reasons for termination. The problem I’m having here is you’re not giving reason for termination, there isn’t customer support, and there’s no way for these people to reach out. Also, if they’re a customer–
Oguz: [crosstalk]. We told them our [reasons], and you’re giving accusations, I’m giving an answer, and you’ve just giving accusations. It becomes one sided. You’re saying that we’re having problems. [crosstalk]
Let me ask you this. Are you telling users specifically why they’ve been terminated?
Oguz: I think we are a fintech company [inaudible] and people think we are an entertainment company… [Editor’s Note: Oguz goes on to reference that Sinemia’s fraud investigation followed the model of an unnamed Fortune 500 company, “one of the biggest companies in the world,” which afterwards terminated accounts without giving a specific reason. He argued that how Sinemia handled it’s fraud investigation was standard operating procedure.]
I know you’re not going to be able to tell me how you searched for fraud, but it is obvious the information came from users’ app. My concern is this, that the app is buggy. I was with a friend who went to check in, couldn’t check in, then got accused of misuse, then customer support said, “We can see you haven’t opened your app. We know that you didn’t try to check in.” My concern is this, if the customer support is saying, “We can see you didn’t open the app,” and I’m sitting there and I can see that they were trying to check in, and they couldn’t, my concern is that if you’re going into the app to search for fraud, based on my experience with your app, that they are not getting accurate information.
Oguz: I understand. Honestly, in technology, there can be problems and we’re always making updates. I understand that you’re thinking if you can’t check in, and that’s why I told you in the check in process, if you couldn’t check in, our customer support has always tried to help. We don’t cancel their accounts for that. There is misuse fee for that. That’s why we don’t cancel the user accounts.
Misuse is listed as a reason for the termination.
Oguz: Yes. This misuse, like can’t check in, we just tell people there’s a misuse fee process. If it is the one time only, we don’t do that in the first time.
I have a regret in my reporting over MoviePass. I believed in them, but what I didn’t know is I didn’t know they weren’t on financially stable ground and couldn’t handle debt. Are you in a position that if you go into debt, can you absorb that as you grow subscriptions?
Oguz: That’s a good question. The public companies are different. Start-ups, we always fight. We found something and we’re trying to make it. That’s what Google did, that’s what Uber did. They’re losing money in there, Spotify, they’re losing money until this year.
Oguz: It’s also the ability to raise [money], of course it’s about the market, it’s about the KPIs [Key Performance Indicators] that grow, and the retention. I can tell you we were super happy with our growth, and that’s been helpful, our retention is high. We are growing.
You’re pointing to companies that as they grew, they had to take on debt. Is part of your business model that you’re going to have to take on debt as you grow?
Oguz: Well, we need to raise, because we have almost one-hundred employees right now, and of course, we have costs. I can tell you for revenue per member basis, we are profitable. We need to raise. That’s if you’re asking, we need to raise.
You need to raise, okay. You feel comfortable with your ability to do that and take on debt?
Oguz: It depends on everything, I can tell you that we are starting our new round.
You’re starting your new round, okay. Well good. I need you to know, I’ve been hard on you, but I am rooting for you, and IndieWire’s rooting for you – these subscriptions can be great for people seeing movies in theaters. The issue is that right now there’s a ton of suspicion about everything that has happened. I know your ratings are low, but the key is going to be the next step and how you move forward with the user experience. Right now, the user experience has really crumbled over the last six to eight weeks and it’s led to a lot of suspicion.
Oguz: I can see that. That’s our work to maintain that and can have these times. We overcome these times over and over again. That’s our dream, affordable movie-going every time. I understand where you’re coming from. That’s why we want to make it sustainable. If we can make it, then we will all win together.
You have people that are in this terminated group, I’m going to be 100% honest with you, because they’re sources of mine, you have people in this terminated in this group who are not fraudsters. These are people who actually work in film. These are people who want to support something like Sinemia. The fact that they have no venue to talk to people, they have no place to take their complaint, they have suffered through poor user experience and they’re very, very suspicious of what just happened. No one denies the need to get rid of fraud. I’m sure there are fraudsters on Twitter, on Reddit, that are emailing Business Insider and IndieWire, but I’m also telling you, and I can promise you this, there are movie fanatics that want this service to work and that wanted to use it, and you’ve cut them off. Once again, I know people who work on these $50+ million movies, they are the last people who are going to try and steal a movie ticket, and you cut them out.
Oguz: I understand.
I don’t know how to express the fact that that is a problem.
Oguz: I do understand you. As a start-up, we made our best to analyze this and get the results. We would look at this on parameters. I understand that’s the parameters. We can’t know the person, and the reason. The parameters are the terms of the user, but I understand you. That’s one thing that I’m getting from this interviewer. Even right now, I’m talking with the board and we’re trying [to figure out] what [more we can do]. That’s why we [announced] the roll over for every [customer].
That’s great. The roll over’s great. The new plans are great.
Oguz: We had the rollover for free. What we want to do is, if we actually have upset customers, that’s also something we will want to work. If there’s terms and there’s parameters, as a business, I told you that the same process that we’re following, it’s actually the largest company in the world and the fortune 500 companies… We didn’t want to invent the process.
My concern, and I’m going to say this again — I’m very, very concerned that people got swept up into this with bad information coming from that app.
Oguz: I also know where you’re coming from, and not against what you’re telling me. We are a growing technology company, we have complexity. Whenever we have some new feature we had to overcome the problems. We are a pioneer over here.. . We have a huge engineering team, but we have also our problems. We will solve that problem. To solve that problem, we need to sustain the business.
You need to open the door to customers that are not being able to use the app, and customers that are coming back to you, “I was not fraudulent.” You have to open the door to them. I have not had this level of readers reaching out to me with this level of anger my whole entire time at IndieWire.
Oguz: Okay. Yeah, that’s also the great thing that we had, that attention, but knowing that is a complaint that we need to overcome.
Please do. When you are ready to open that communication, when people have been cut out, there is a venue for them to come back to you, please have [the publicist] email me the details of that, because that’s what we need to share with the readers more than anything. Right now, the message is conversation is over, fill out your refund form.
Oguz: You know what Chris? In this conversation…since we talked like an hour, that’s something in my mind right now. I’m saying, we can come up with you, even before you write, that maybe we can something work out for that. Different channels.
The publicist has my number. Thank you.
Editor’s Note: This weekend Sinemia created a new customer service site specifically for users to contest their terminations. You can find that here.
The company also created another customer service site specifically for reporting bugs in the app. You can find that here.