Lumos Labs Settles with the FTC for Allegedly Deceptive Advertising of its Brain Training Program
The Federal Trade Commission announced a settlement requiring Lumos Labs, the company behind the Lumosity “brain training” program, to pay $2 million to the FTC and agree to certain future restrictions on advertising.
The FTC accused Lumosity and two of its chief officers of making unfounded claims that its web-based games could help users perform better on mental tasks and reduce or delay the cognitive impairment associated with age or serious medical conditions. Jessica Rich, Director of the FTC’s Bureau of Consumer Protection, said that Lumosity “preyed on consumers’ fears about age-related cognitive decline, suggesting their games could stave off memory loss, dementia, and even Alzheimer’s Disease.” Specifically, the FTC’s complaint alleged that Lumosity did not have any scientific studies to support its claims about the supposed benefits associated with playing Lumosity games. The FTC also alleged that Lumosity solicited the customer endorsements featured in its advertisements through contests where people could win prizes like an iPad or a trip to San Francisco. Lumosity should have disclosed that fact, according to the FTC.
As part of a proposed settlement, Lumosity agreed to a $50 million judgment, which would be suspended after Lumosity pays $2 million to the FTC. Lumosity also agreed to refrain from making any future representations about the cognitive benefits of its games unless those representations were supported by “competent and reliable scientific evidence.” In a post on the FTC’s Business Blog, the agency touted the settlement as proof that “[w]hen it comes to unsubstantiated cognition promises, the FTC isn’t playing games.” As a condition of the settlement, Lumosity must contact customers who enrolled in an auto-renewal subscription plan and offer them a way to cancel and avoid future billing with just one click.
This settlement shows, once again, that companies making claims based on health and wellness need to have the appropriate science to back up those claims. The settlement also demonstrates that the FTC continues to focus on enforcing its Endorsements and Testimonials Guidelines.