Brain app startup settles with FTC over false product claims

Lumos Labs' Android app--Courtesy of Lumos Labs

Lumos Labs is shelling out $2 million to settle claims from the FTC that it duped consumers about its "brain training" program and apps by convincing them that its games could help stave off serious health conditions or cognitive impairments.

The FTC fined Lumos $50 million, but "due to its financial condition" the company will only have to fork over $2 million to the regulator, the FTC said in a statement. San Francisco-based Lumos will also have to notify subscribers who signed up for its Lumosity program between Jan. 1, 2009 and Dec. 31, 2014 about the settlement and give them an option to cancel their subscription, and post full-screen notices to notify people who use their mobile app.

"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," Jessica Rich, head of the FTC's Bureau of Consumer Protection, said in a statement.

Lumosity comprises 40 games that supposedly target and train areas of the brain. Lumos promoted the program through various outlets including TV, radio, social media and their website, saying that training on the games for 10 to 15 minutes three or four times a week would allow users to realize their "full potential in every aspect of life" and improve their performance on daily tasks. The company also claimed that playing the games could delay age-related diseases such as dementia and Alzheimer's and also reduce cognitive issues stemming from conditions such as PTSD or stroke, the FTC said in a statement.

Plus, the company did not reveal that it collected some of the customer testimonials featured on its website by promising prizes, including a free iPad and a round-trip to San Francisco. The testimonials made claims about the program's cognitive benefits, with one reading: "I can tell a big difference. Decisions come quicker. I'm more productive. It's serious brain training, it just feels like games…"

Lumos is not confirming or denying the FTC's allegations under the recent settlement, The Wall Street Journal reports. "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," the company said, as quoted by the WSJ.

- read the FTC statement
- get more from the FTC
- here's the WSJ story (sub. req.)

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