Tuesday, January 05, 2016

Lumosity to Refund App Users $2 million Due to Unproven Results

Users of the popular Lumosity "Brain Training" program may soon see a refund as the company has agreed to settle with the Federal Trade Commission over unfounded claims that their set of applications actually worked as advertised.

“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.”

At the heart of the issue are claims that Lumosity made about their online apps and mobile games and whether or not those games actually impacted a person's ability to learn faster or stave off the effects of intellectual impairment that comes with aging.

In their complaint (PDF) the FTC charged that Lumosity falsely claimed that their dozens of online or mobile games, designed to train specific areas of the brain, would help customers reach their "full potential in every aspect of life," such as in school, at work, and in sports, and that using these apps would protect against dementia and Alzheimer's disease. Among other things, the company also claimed that the training could help customers reduce the side effects of chemotherapy.

Under the terms of the settlement (PDF) Lumos Labs, the parent company of Lumosity, was imposed with a $50 million judgement, which will be stayed due to the company's poor financial standings. Instead the company must agree to pay $2 million dollars in damages that the FTC will then issue as refunds to customers that had signed up for the services or in app subscriptions. The order requires the company to notify subscribers who signed up for an auto-renewal plan between January 1, 2009 and December 31, 2014 about the FTC action and to provide a means to cancel their subscription.

The agreement will also forbid the company from "making any representation, expressly or by implication" that the product "improves performance in school, at work, or in athletics" or "delays or protects against age-related decline in memory or other cognitive function, including mild cognitive impairment, dementia, or Alzheimer's disease." The settlement also says the company cannot claim that the product "reduces cognitive impairment caused by health conditions, including Turner syndrome, post-traumatic stress disorder (PTSD), attention deficit hyperactivity disorder (ADHD), traumatic brain injury (TBI), stroke, or side effects of chemotherapy."

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