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Brain Game Maker Lumosity Fined $2 Million For False Advertising (sciencemag.org)

Posted by Soulskill on from the snake-oil-punishment dept.

sciencehabit writes: Lumos Labs, the company that produces the popular 'brain-training' program Lumosity, yesterday agreed to pay a $2 million settlement to the Federal Trade Commission (FTC) for running deceptive advertisements. Lumos had claimed that its online games can help users perform better at work and in school, and stave off cognitive deficits associated with serious diseases such as Alzheimer's, traumatic brain injury, and post-traumatic stress.

The $2 million settlement will be used to compensate Lumosity consumers who were misled by false advertising, says Michelle Rusk, a spokesperson with the FTC in Washington, D.C. The company will also be required to provide an easy way to cancel auto-renewal billing for the service, which includes online and mobile app subscriptions, with payments ranging from $14.95 monthly to lifetime memberships for $299.95. Before consumers can access the games, a pop-up screen will alert them to the FTC's order and allow them to avoid future billing, Rusk says.

9 of 70 comments (clear)

  1. The game worked... by Hussman32 · · Score: 4, Funny

    It seems as though the plaintiffs became smart enough to realize it's possible to use the legal system to enrich themselves. Was it the game that did it?

    --
    "Who are you?" "No one of consequence." "I must know." "Get used to disappointment."
  2. Really? by ltrand · · Score: 5, Interesting

    Wait, let me get this straight, you can sell herbal supplements with the same claim and weak/non-existent scientific support and be in the clear, but this is worthy of a fine? Or how about selling "unlimited" data plans that are explicitly NOT unlimited, and not be hit with false advertising either?

    Oh, wait. I forgot what country this was. They probably didn't give the right bribes out to be in the clear. NM, nothing to see here.

    1. Re:Really? by lucm · · Score: 5, Insightful

      Wait, let me get this straight, you can sell herbal supplements with the same claim and weak/non-existent scientific support and be in the clear, but this is worthy of a fine? Or how about selling "unlimited" data plans that are explicitly NOT unlimited, and not be hit with false advertising either?

      It's like complaining about someone finding a cure for lung cancer while liver cancer still kills people.

      Those apps that prey on people's quest for better health are a shame and it's a good thing if they get fined. There are other crooks out there but let's celebrate the victories, not use them to promote vague accusations of bribery.

      --
      lucm, indeed.
    2. Re:Really? by ltrand · · Score: 2

      Yeah, except that AT&T & the rest still advertise "unlimited XGB" despite it being an oxymoron.

      No, what goads me is that the prosecution over false advertisement is very arbitrary in general. Or at least on the cover seems that way given the amount of products out there that literally cannot work as advertised.

  3. Re:5 stars by ewibble · · Score: 2

    But if only 1 million people pay at $11 a month, a 2 Million dollar fine is peanuts, it always astounds me how companies get fined so little relative to there income, and the amount they swindle, and individuals get fined so much (relatively speaking)

  4. Re:Where's the false advertising by ewibble · · Score: 4, Informative

    They did get away with it, https://gigaom.com/2013/01/31/...
    give me $24 Mil in revenue a year, I will gladly pay a one off $2 Mill fine, change my wording slightly e.g. stick the word "may" in it somewhere and continue trading as normal.

  5. Bullshit ... by gstoddart · · Score: 2, Interesting

    The $2 million settlement will be used to compensate Lumosity consumers who were misled by false advertising

    Name me one fucking instance where the settlement went to the consumers who were misled. This will go the lawyers, and you'll get mailed a fucking coupon for $5 off your next goddamned month of Lumosity.

    These settlements are complete horseshit, and don't act as a deterrent. Compensate consumers my ass.

    And, yes, I'm intentionally swearing for effect, because claiming this will compensate consumers if a completely fucking lie.

    You want to compensate people and act as a deterrent? Let them line up and take a swipe at the CEO. THAT might stop this kind of behavior. This $2 million settlement? That won't do a damned thing.

    --
    Lost at C:>. Found at C.
  6. Re:Lumosity helped me recover from a concussion by ranton · · Score: 3, Informative

    I finally felt well enough to try Lumosity ... [and got better]

    This is why actual research has control groups. After your concussion started improving, you could have probably sprinkled the fairy dust I just invented on your head and would start to see improvement in a week. I'm sorry about your tough recovery, but your anecdote is no different than the moms who think vaccines caused their kid's autism. There are plenty of people who think some sugar water cured their cancer too.

    --
    -- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
  7. Re:Where's the false advertising by BenVis · · Score: 3, Interesting
    from TFA:

    The order also 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.

    To me that suggests that, 24 Mil in revenue in 2012 notwithstanding, $2 million is already enough to ruin the company.

    --
    "Preceded by itself yields falsehood" preceded by itself yields falsehood.