Lumosity Settlement Jogs the Brain Trainer’s Pocketbook
A company best known for its brain training software is being fined $2 million for its allegedly deceptive advertising.
Regulators with the Federal Trade Commission say Lumosity has no evidence to support claims that the games and activities on its website and apps do anything to enhance brain function or ward off degenerative brain diseases.
FTC Bureau of Consumer Protection Director Jessica Rich says, “Lumosity preyed on consumers’ fears about age-related cognitive decline, suggesting their games could stave off memory loss, dementia, and even Alzheimer’s disease. But Lumosity simply did not have the science to back up its ads.”
In a press release the FTC also charged that, through paid promotions and advertising on major national networks Lumosity, as the defendant in their case, "used Google AdWords to drive traffic to their website, purchasing hundreds of keywords related to memory, cognition, dementia, and Alzheimer’s disease, according to the complaint....The complaint also charges the defendants with failing to disclose that some consumer testimonials featured on the website had been solicited through contests that promised significant prizes, including a free iPad, a lifetime Lumosity subscription, and a round-trip to San Francisco."
For their part those behind Lumosity appear to be revising their marketing. On the company's website (lumosity.com) officials now characterize their research as follows:
"What we did
Our scientists had 4,715 participants complete the study. Half trained with Lumosity, while the rest did online crossword puzzles to control for placebo effects.
What we found
After 10 weeks, the Lumosity group improved more than the crosswords group on an aggregate assessment of cognition.
These results are promising, but we need to do more research to determine the connection between improved assessment scores and everyday tasks in participants’ lives. That’s our next focus."
In a story by CNBC's Robert Ferris, company representatives were quoted as saying, "Neither the action nor the settlement pertains to the rigor of our research or the quality of the products — it is a reflection of marketing language that has been discontinued."
According to the FTC the court order requires both Lumosity and its co-founder and former CEO Kunal Sarkar and co-founder and former Chief Scientific Officer Michael Scanlon, to "have competent and reliable scientific evidence before making future claims about any benefits for real-world performance, age-related decline, or other health conditions."
A fifty million dollar judgement has been imposed against Lumos Labs, which the FTC says will be crippled financially after the company pays a $2M fine to the FTC.
All Lumosity subscribers who signed up for an auto-renewed subscription plan between January 1, 2009 and December 31, 2014 will be provided notice about the legal proceedings and permitted to cancel their subscriptions.
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