Lumosity forks out $2m after claiming its 'brain training' games worked
Lumosity – the maker of games that supposedly increase your mental agility – has coughed up $2m after being accused of false advertising.
And the San Francisco upstart will have to cut a further $50m check if it doesn't clean up its act.
The money was extracted by the US Federal Trade Commission (FTC) in an out-of-court settlement announced today. The regulator had charged the software company with deception for making "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."
"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."
For the past seven years, Lumosity has been marketing computer games as a way for schoolchildren to speed up their learning and increase cognitive skills, and for seniors to maintain their faculties and fight off the effects of incipient dementia and Alzheimer's disease.
The biz offered around 40 games to apparently hone different numerical, spacial, and coordination skills. It claimed that playing them for 10 to 15 minutes, several days per week, would bring about an efficacious effect on the player's brain functions.
The company sells a variety of subscription options for the games, ranging from $14.95 a month to a lifetime subscription for $299.99, and the software was extensively advertised on Fox News, CNN, and NPR, as well as online.
The only problem, from the FTC's viewpoint, is that there's no scientific evidence to back up these claims, according to the official complaint [PDF].
The FTC is also peeved that Lumosity allegedly broke the rules governing customer testimonials. The firm's website had 160 testimonials from satisfied customers, the regulator notes, but neglected to add how they were gathered.
According to the FTC, the testimonials were solicited by Lumosity as part of a promotion, whereby customers were asked to submit a comment on the firm's software as part of a competition that could net them prizes like a free iPad, a lifetime subscription to the Lumosity Program, and a round-trip to San Francisco.
There's nothing wrong with doing this, so long as the inducements are made clear on the testimonials page. But that seems to have slipped the mind of Lumosity's management – and thus the settlement payout.
"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," Lumosity told El Reg.
"Our focus as a company has not and will not change: we remain committed to moving the science of cognitive training forward and contributing meaningfully to the field's community and body of research."
The FTC voted 4-0 for the fine, with Commissioner Julie Brill issuing a personal statement supporting the financial penalty.
"I caution Lumosity and other companies about making representations that overstate the benefits of these products or misleadingly imply that improvements in the game setting transfer to real-world benefits," she wrote.
"Section 5 of the FTC Act requires that advertisers have a reasonable basis to support their express and implied advertising claims before they are disseminated, to ensure that such claims are truthful and non-deceptive. Advertisers must also have rigorous, scientific support to substantiate claims for products that purport to prevent or treat health or disease-related conditions." ®