Lumosity to Pay $2 Million to Settle FTC Deceptive Advertising Charges
for Its “Brain Training” Program
Company Claimed Program Would Sharpen Performance in Everyday Life and
Protect Against Cognitive Decline
For Release
January 5, 2016
The creators and marketers of the Lumosity “brain training” program have
agreed to settle Federal Trade Commission charges alleging that they
deceived consumers with unfounded claims that Lumosity games can help
users perform better at work and in school, and reduce or delay
cognitive impairment associated with age and other serious health
conditions.
As part of the settlement, Lumos Labs, the company behind Lumosity, will
pay $2 million in redress and will notify subscribers of the FTC action
and provide them with an easy way to cancel their auto-renewal to avoid
future billing.
“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.”
According to the FTC’s complaint, the Lumosity program consists of 40
games purportedly designed to target and train specific areas of the
brain. The company advertised that training on these games for 10 to 15
minutes three or four times a week could help users achieve their “full
potential in every aspect of life.” The company sold both online and
mobile app subscriptions, with options ranging from monthly ($14.95) to
lifetime ($299.95) memberships.
Lumosity has been widely promoted though TV and radio advertisements on
networks including CNN, Fox News, the History Channel, National Public
Radio, Pandora, Sirius XM, and Spotify. The defendants also marketed
through emails, blog posts, social media, and on their website,
Lumosity.com, and 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 FTC alleges that the defendants claimed training with Lumosity would
1) improve performance on everyday tasks, in school, at work, and in
athletics; 2) delay age-related cognitive decline and protect against
mild cognitive impairment, dementia, and Alzheimer’s disease; and 3)
reduce cognitive impairment associated with health conditions, including
stroke, traumatic brain injury, PTSD, ADHD, the side effects of
chemotherapy, and Turner syndrome, and that scientific studies proved
these benefits.
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.
The proposed stipulated federal court order requires the company and the
individual defendants, 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.
The order also imposes a $50 million judgment against Lumos Labs, which
will be suspended due to its financial condition after the company pays
$2 million to the Commission. The order requires the company to notify
subscribers who signed up for an auto-renewal plan between January 1,
2009 and December 31, 2014 about the FTC action and to provide a means
to cancel their subscription.
The Commission vote authorizing the filing of the complaint and proposed
stipulated order was 4-0, with Commissioner Julie Brill issuing a
separate concurring statement. The FTC filed the complaint and proposed
order in the U.S. District Court for the Northern District of
California, San Francisco Division.
The FTC is a member of the National Prevention Council, which provides
coordination and leadership at the federal level regarding prevention,
wellness, and health promotion practices. This case advances the
National Prevention Council’s goal of increasing the number of Americans
who are healthy at every stage of life. This case is part of the FTC’s
ongoing efforts to protect consumers from misleading health advertising.
NOTE: The Commission authorizes the filing of a complaint when it has
“reason to believe” that the law has been or is being violated, and it
appears to the Commission that a proceeding is in the public interest. A
stipulated order has the force of law when signed by the district court
judge.
The Federal Trade Commission works to promote competition, and protect
and educate consumers. You can learn more about how competition benefits
consumers or file an antitrust complaint. Like the FTC on Facebook (link
is external), follow us on Twitter (link is external), read our blogs
and subscribe to press releases for the latest FTC news and resources.
Contact Information
MEDIA CONTACT:
Mitchell J. Katz
Office of Public Affairs
202-326-2161
STAFF CONTACT:
Michelle Rusk
Bureau of Consumer Protection
202-326-3148
---end--
Albert Peres
afperes ( at ) 3129.ca
416.660.0847
