Lumosity Tagged for $2 million by FTC

234** Maker of “Brain Training” Subscription Service Settles with FTC on Allegations that it did not Have the Science to Back Up its Claims of Cognitive Benefit ** . . .                                                                                                                                                                                                                                                                The Federal Trade Commission has agreed to a settlement with Lumosity Inc., with respect to the company’s well known and widely advertised “brain training” program – after the FTC filed a complaint alleging Lumosity’s ads touting the cognitive benefits associated with the products were scientifically unfounded.  Federal Trade Commission v. Lumos Labs, Inc., No 3:16-cv-00001-SK (N.D Cal. Jan. 4, 2016) at ECF No. 1 (Compl.).  The settlement terms include a payment by Lumosity of $ 2 million and a requirement to notify customers who signed up on an auto-renewal plan between January 1, 2009 and December 31, 2014 about their ability to cancel their subscription.  Id. at ECF No. 10 (Order).  The FTC has issued a public statement about the settlement stating, in part: “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]. . .  simply did not have the science to back up its ads.”  The FTC complaint also alleges that Lumosity’s consumer testimonials featured on its website had been, in some cases, pay-to-play – i.e., were solicited through contests that promised significant prizes, including a free iPad, a lifetime Lumosity subscription, and a round-trip to San Francisco.  Id. at ECF No. 1 (Compl.) ¶¶ 19 – 21.  The settlement order requires the company and its officers 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.  Id. at ECF No. 10 (Order) at 7 – 9.  The order also imposes a $50 million judgment against Lumosity – suspended upon payment of $2 million to the FTC.  Id. at 10 – 12.

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