As you may have read by now, the makers of the Lumosity “brain training” program – Lumos Labs, Inc., and its founders, Kunal Sarkar and Michael Scanlon – have agreed to pay $2 million in redress (an amount suspended from $50 million, due to the company’s poor financial condition), and will be required to provide its subscribers with an easy way to cancel auto-renewal to avoid future billing.

In the complaint that led to the settlement, the FTC alleged that the defendants lacked adequate support for Lumosity’s advertising which claimed that scientific studies proved that training with its games would: (1) improve performance on everyday tasks, in school, at work, and in athletics; (2) delay age-related cognitive decline and protect against mild cognitive impairment, dementia, and Alzheimer’s disease; and (3) reduce cognitive impairment associated with health conditions, including stroke, traumatic brain injury, PTSD, ADHD, the side effects of chemotherapy, and Turner syndrome. The complaint also charged the defendants with failing to disclose that some consumer testimonials featured on the 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.

The FTC’s investigation and prosecution remains confidential, and pursuant to the settlement, the defendants neither admitted nor denied any of the allegations in the complaint, and the stipulated final judgment and order was imposed without delving into the merits of each party’s respective position. So unfortunately, we’re left to speculate regarding the adequacy – or inadequacy – of Lumosity’s substantiation for its advertising claims.

However, by reading between the lines, there are a number of instructive takeaways from the Lumosity matter:

Takeaways:

  • In recent years, the FTC has targeted products promising improved cognition, and based on FTC comments in connection with the Lumosity settlement, we can expect this focus to continue in the future
  • While Lumosity made a wide range of cognition improvement claims (and this was certainly a factor in the FTC’s complaint), it seems likely that its claims specifically focusing on reversing the effects of diseases and aging increased public scrutiny and helped bring Lumosity into the FTC’s crosshairs. Lumosity didn’t help its case by broadly advertising its disease-related claims via television advertisements, which aired nationally on over 40 broadcast and cable networks , and via an extensive search engine campaign, in which Lumosity purchased hundreds of keywords, including many variations of words related to memory, intelligence, dementia and Alzheimer’s disease. The increased exposure caught the attention of the scientific community too. In 2014, more than 70 university neuroscience and psychology professors signed a consensus document objecting to claims that brain training games can reduce or reverse cognitive decline. Make no mistake…the FTC is affected by the public zeitgeist.
  • Cognition improvement claims require a high level of substantiation. Pursuant to the final judgment and order, Lumosity is required to possess and rely upon competent and reliable scientific evidence in support of its cognition claims, which must consist of human clinical testing that is: (a) randomized, adequately controlled, and blinded to the maximum extent possible; and (b) conducted by researchers qualified by training and experience to conduct such testing.
  • Further, the FTC made it clear in a follow-up blog posting that the testing must show that study results will translate into real world tangible benefits. For example, while Lumosity was able to track users’ game performance over time, the FTC remained unconvinced that these tracking mechanisms showed anything beyond the users simply getting better at Lumosity’s games.
  • Finally, the FTC remains committed to enforcing its Guides Concerning the Use of Endorsements and Testimonials in Advertising.  Among its provisions, the Guides state that when there exists a material connection between the endorser and the seller, such a connection must be clearly and conspicuously disclosed to consumers.  This requirement not only extends to celebrities receiving substantial sums, but also regular people who are offered benefits, prizes or money in exchange for their testimonial.