UPDATED 16:15 EST / JANUARY 06 2016

NEWS

Creators of brain-game ‘Lumosity’ hit with $2M fine for over-promising health benefits

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.”

Image courtesy of Lumos Labs

Since you’re here …

… We’d like to tell you about our mission and how you can help us fulfill it. SiliconANGLE Media Inc.’s business model is based on the intrinsic value of the content, not advertising. Unlike many online publications, we don’t have a paywall or run banner advertising, because we want to keep our journalism open, without influence or the need to chase traffic.The journalism, reporting and commentary on SiliconANGLE — along with live, unscripted video from our Silicon Valley studio and globe-trotting video teams at theCUBE — take a lot of hard work, time and money. Keeping the quality high requires the support of sponsors who are aligned with our vision of ad-free journalism content.

If you like the reporting, video interviews and other ad-free content here, please take a moment to check out a sample of the video content supported by our sponsors, tweet your support, and keep coming back to SiliconANGLE.