Popular brain training games creator Lumosity has agreed to settle a $2 million fine from the Federal Trade Commission (FTC) regarding “false advertising” over the efficacy of its products.
Lumosity’s claims regarding the brain improvement features of its apps — including the reduction of intellectual impairment from aging, the improvement of athletic performance, and the ability to help students learn better — were branded as “deceptive” by the FTC.
The resulting $2 million fine will be used to refund consumers that were duped by the company’s advertising, which was featured on major media outlets including CNN, Fox News, and National Public Radio. Lumosity’s suite of 40 apps can be purchased on a subscription-based payment scheme of $14.99 per month or lifetime memberships of $299.95.
According to the FTC, Lumosity failed to provide evidence to back up its claims that its apps could prevent cognitive impairment and even combat health conditions. The order dictates that the company must now notify subscribers who signed up between January 1, 2009, and December 31, 2014, of the action and provide an option for them to cancel their membership.
“Lumosity preyed on consumers’ fears about age-related cognitive decline, suggesting their games could stave off memory loss, dementia, and even Alzheimer’s disease,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “But Lumosity simply did not have the science to back up its ads.”
Additionally, the FTC action criticizes Lumosity’s use of prize contests to solicit customer testimonials for its website. The company would offer giveaways including round-trips to San Francisco, free iPads, and lifetime subscriptions.
Formed in San Francisco in 2005 by Kunal Sarkar and Michael Scanlon, Lumosity now boasts 70 million users across 182 countries, according to its website. The company has stated that the settlement will allow it to move on, adding that the marketing language referred to in the FTC complaint has been “discontinued” — reports Reuters.
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