Lumosity's online "brain training" program was playing Jedi mind tricks (yes, a Star Wars pun) on consumers according to a complaint filed by the Federal Trade Commission (FTC) against Lumos Labs, Inc. (Lumosity) and its officers. The FTC's charge reinforces that advertisers touting the health benefits of products or services must be able to prove that the advertised benefits exist.
By proof, of course, we're really talking about claim substantiation. In this case, Lumosity advertised that its program could improve an array of cognitive issues, ranging from performance in school, at work, or in sports, to delaying age-related memory decline or cognitive impairment. To experience improvement in these areas, Lumosity's ads suggested that subscribers need only devote 10 to 15 minutes a few times a week to playing Lumosity's approximately 40 brain games. According to the FTC, however, Lumosity lacked "competent and reliable scientific evidence" for it to "widely promote" the cognitive benefits of its games. Until such scientific evidence exists, Lumosity is prohibited from making claims that are arguably the selling points of its services.
What's more, in addition to falling short on its claim substantiation, the FTC alleged that Lumosity failed to disclose material information about its relationship with consumers who gave testimonials. Specifically, some consumers whose testimonials Lumosity used received substantial prizes, like iPads or lifetime subscriptions. As we recently discussed, the FTC takes the position that absent disclosure of the material connection between an advertiser and someone giving a testimonial, consumers are unlawfully deceived because they are unable to assess the credibility of testimonials.
This settlement is not just an afterthought for the brain game company nor should it be for any advertiser promoting the health benefits of their products or services: $2 million paid, with a $50 million judgment looming. Advertisers should ensure that claims are properly substantiated, especially where, as here, the claim is the fundamental underpinning of the advertiser's business.
Read the FTC's press release here.
This article is presented for informational purposes only and is not intended to constitute legal advice.