NEWS
NEWS
NEWS
Lumos Labs Inc has been forced to accept a $2 million settlement by the Federal Trade Commission (FTC) after it made some lofty (and unsupported) claims about the mental health benefits from playing its “brain training” game Lumosity. Specifically, The FTC accused Lumos Labs of “deceiving customers” in advertisements for Lumosity claimed that the game could make players perform better at work or even alleviate symptoms of Alzheimer’s disease.
“Lumosity preyed on consumers’ fears about age-related cognitive decline, suggesting their games could stave off memory loss, dementia and even Alzheimer’s disease,” Jessica Rich, director of the FTC’s Bureau of Consumer Protection, said in a statement. “But Lumosity simply did not have the science to back up its ads.”
The FTC complaint names Lumos Labs CEO Kunal Sarkar as having “formulated, directed, controlled, had the authority to control, or participated in the acts and practices set forth in this Complaint.” This includes the marketing strategy for Lumosity, which according to the complaint, was advertised both online and on television on at least 44 different network and cable channels.
While the settlement does not require Lumos Labs to admit or deny fault, the company is required to notify all users of the complaint and allow them to easily cancel their auto-renewal subscriptions for the service.
Originally, the FTC had intended to fine Lumos Labs for a whopping $50 million, but it instead fined the company only $2 million due to its “financial condition.”
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