Lumos Labs, the creator of “brain training program” Lumosity with $67.5 million in venture funding, has agreed to pay a $2 million settlement to the Federal Trade Commission for its deceptive advertising. As part of the settlement, the company has to notify all of its customers who signed up for an auto-renewal plan between Jan. 1, 2009 and Dec. 31, 2014 about the FTC settlement, and give them the chance to cancel their subscriptions. Before making future claims about Lumosity’s potential benefits on brain performance, the U.S. District Court in San Francisco has ordered that Lumos Labs must “possess and rely upon competent and reliable scientific evidence.”
In the FTC’s complaint, it claimed that Lumos Labs deceived people with “unfounded claims” that the app could help people perform better in school, at work and reduce or improve cognitive impairment. The FTC says Lumos Labs did not have the science to back up its claims. The complaint also alleges that Lumos Labs failed to disclose that some of the consumer testimonials had been solicited through contests that promised prizes like a free iPad and a round-trip flight to San Francisco.
“Lumosity preyed on consumers’ fears about age-related cognitive decline, suggesting their games could stave off memory loss, dementia, and even Alzheimer’s disease,” FTC Bureau of Consumer Protection Director Jessica Rich said in a statement. “But Lumosity simply did not have the science to back up its ads.”
Lumosity’s program has over 40 games that focus on memory, attention, flexibility, problem solving and processing speed. The programs are available via subscriptions ranging from an $11.95 monthly fee to a $299.95 fee for a lifetime membership.
I’ve reached out to Lumos Labs, and the company’s PR firm said that it’s “working on a statement.”
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