Lumosity Settlement To Result in $2 Million in Refunds Over False “Brain Training” Claims

Government trade officials have reached a $2 million settlement with Lumosity makers, resolving claims that the company made deceptive and unfounded claims about their popular brain-training games, indicating that the app could enhance brain function and prevent certain cognitive diseases, without providing adequate science backing their advertisements. 

The Federal Trade Commission (FTC) announced the settlement agreement with Lumos Labs on January 5, stating the company was initially issued a $50 million judgment, but is accepting a $2 million settlement that will refund subscribers who were deceived by false advertising. The FTC is also requiring Lumos Labs to provide subscribers ways to cancel their subscriptions without any early cancelation penalties.

The Lumosity settlement was announced after the FTC conducted an independent investigation to determine if the advertising campaigns that Lumos Labs were running actually had adequate scientific backing to support their games’ benefits to consumers.

Specifically, the FTC investigated advertising claims that using the brain-training games on the website Lumosity would improve attention spans, memory, improve school performance, and improve memory problems for individuals with cognitive side effects from the use of chemotherapy. The FTC challenged Lumos Labs promises to subscribers that using the brain exercise games would translate to real-life benefits.

Lumosity is an online game provider produced by Lumos Labs, which offers more than 50 games that the company claimed can help reduce the effects of dementia, enhance memory and boost brain function.

Lumos Labs was alleged to have promoted the website using deceptive trade practices, making claims that training with the games for 10 to 15 minutes several times a week could help people reach their full potential in every aspect of life, without providing any scientific backing to support the health benefits they advertised. Subscribers to the site could either pay a $14.95 monthly subscription fee or pay a lifetime membership for $299.95.

In addition to returning some of the money to subscribers, Lumos Labs will also be forced to stop making inflated health benefit claims about its products. The FTC is requiring Lumos Labs to offer subscribers between 2009 and 2016 ways to cancel their subscriptions without paying any additional cancellation fees. As part of the settlement agreement, Lumos Labs promised to continue its research based on cognitive training benefits and providing better evidence to support the claims deemed “unfounded”.

The FTC claimed that Lumos Labs promoted their services based on unfounded evidence and marketed their false claims through National Public Radio, Spotify, the History Channel, CNN, Fox News and many more mainstream advertising channels. The FTC discovered during the investigation that Lumos Labs had used Google AdWords to specifically market keyword searches using hundreds of keyword search terms such as memory, cognition, dementia, and Alzheimer’s disease.

Director of the FTC’s Bureau of Consumer Protection says that Lumosity used these types of marketing strategies to prey on consumers’ fears about age-related cognitive decline and offered their services as preventative steps without offering scientific research to support their health benefits.

The FTC was made aware of the potential false advertising practices after 70 neuroscientists and other cognition researchers signed a statement in the fall of 2014 critiquing the claims made by several makers of brain-training games. Also, in December 2014, WebMD issued a special report examining the science behind brain-training and noted that the growing industry of brain exercise games claiming health benefits were being marketed and operated under false claims largely unnoticed by federal regulators.

According to the Federal Trade Commission’s senior staff attorney leading the investigation, Michelle Rusk, claims Lumos Labs offered inflated claims about the benefits of their games and by practicing the games may have made subscribers better at those particular games, but does not translate to any benefit in a real-world setting.

Rusk also announced that this is not the first settlement to be reached by the FTC on deceptive advertising from brain-training companies. The FTC won a judgment against Focus Education for making unsupported claims about its Jungle Rangers game that was marketed to kids as a way to improve school performance, behavior and to help children with ADHD. According to Rusk, the FTC cannot details of ongoing investigations but promised more actions against brain-training companies are coming.