(CN) - The creator of the popular Lumosity brain training program will pay $2 million to settle claims it deceived consumers with unfounded claims about their product, the Federal Trade Commission announced.
In its advertisements for Lumosity, Lumos Labs has long maintained that users of its games perform better at work and in school, and have reduced or delayed cognitive impairments associated with age and health conditions like stroke, traumatic brain injury or PTSD.
The commission, however, claims Lumos Labs simply does not have the science to back up these claims.
According to its complaint, the Lumosity program consists of 40 games purportedly designed to target and train specific areas of the brain. The company advertised that training on these games for 10 to 15 minutes three or four times a week could help users achieve their "full potential in every aspect of life."
The company sold both online and mobile app subscriptions, with options ranging from monthly ($14.95) to lifetime ($299.95) memberships.
In addition to calling Lumos Labs' claims into question, the agency also charges the company failed to disclose that some consumer testimonials featured on its website had been solicited through contests that promised significant prizes, including a free iPad, a lifetime Lumosity subscription, and a round-trip to San Francisco.
Under the terms of the settlement, Lumos Labs must notify subscribers who signed up for an auto-renewal plan between January 1, 2009, and December 31, 2014, of the commission action and provide them with an easy way to cancel their auto-renewal to avoid future billing.
The proposed stipulated federal court order also requires the company and the individual defendants, co-founder and former CEO Kunal Sarkar and co-founder and former Chief Scientific Officer Michael Scanlon, 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.
The order imposes a $50 million judgment against Lumos Labs, which will be suspended due to its financial condition after the company pays $2 million to the Commission.
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