If you've ever wondered whether playing "brain training" games for 15 minutes a few days a week can make you smarter or protect against cognitive disorders, you are not alone. The Federal Trade Commission (FTC) wondered the same thing and then filed charges of deceptive acts and false advertising against Lumos Labs, the maker of Lumosity and LumiKids.
As part of a proposed consent judgment and order, Lumos, admitted it did not have reliable scientific evidence that its games delay or protect against a decline in cognitive function or that they improve performance in school, at work, or in athletics as advertised. The company also agreed that it would not make future claims about benefits for real-world performance, age-related decline, or other health conditions until there was sufficient human clinical testing in "randomized, adequately controlled, and blinded to the maximum extent practicable conducted by researchers qualified by training and experience to conduct such testing." Although the FTC can claim a judgment of $50 million, Lumos will only have to pay $2 million and the rest will be suspended because of the financial condition of Lumos.
Contact the consumer law attorneys at Meyer & Bardill, LLC for a free case evaluation if you relied upon Lumos Labs false advertising and deceptive practices.
False Advertising and Deceptive Acts and Practices
Advertisers must have at least a reasonable basis to support their advertising claims before to ensure that such claims are truthful. When companies claim that their products prevent or treat diseases or medical conditions, they must also have rigorous, scientific support to substantiate those claims. The FTC has made clear that it will protect consumers by carefully and aggressively scrutinizing advertisements about the health benefits of products.
So, where did Lumos go wrong? The Lumosity website used to cite to numerous studies that purported to show some cognitive benefits of the training (before the litigation). The FTC complaint and the settlement suggest that Lumos made some wild and extravagant claims for the real-world health benefits of its products, and it was this type of overreaching that the FTC's ire.
The advertising campaigns run by Lumos claimed that the training would "benefit everyone." Moreover, those benefits were as broad and varied as one could imagine. Lumos declared that the games could help students on standardized tests and athletes in sports competitions. Stroke patients and cancer survivors could regain cognitive abilities. Combat veterans, senior citizens, and children with ADHD were all promised a brighter tomorrow. By offering its products as a panacea for all that ails us, Lumos comes across as the 21st Century Clark Stanley, the "Rattlesnake King."
While the scientific studies may have supported some claims of health benefits, they were inadequate to support the exceptional real-world health benefits claimed by Lumos. The FTC's complaint did not attack the methodologies of the studies directly, but the proposed order implies that the research was flawed and lacked supporting documentation. There may have been some questionable conflicts of interest on the part of some of the researchers as well. According to the proposed order, any future research relied upon by Lumos must be "based on standards generally accepted by experts in the relevant field" and conducted by "researchers qualified by training and experience to conduct such testing."
But what about all those customer endorsements?
Featured prominently in Lumosity's advertising were customer testimonials, promoting a wide range of benefits. The FTC alleged that of the 160 testimonials, 46 of them "were not spontaneously generated by consumers but instead were solicited by Defendants as part of contests where consumers received significant prizes such as an iPad, a trip to San Francisco, and a lifetime subscription to the Lumosity Program." Lumos failed to disclose these inducements adequately.
Why can't consumers file a class action for refunds?
If Lumos had lied to its customers, why did no one file a class action against it? The answer lies in the Lumosity Terms of Service, Section 10, Agreement to Arbitrate and Waiver of Class Action Claims. Lumos made its customers waive their rights to to bring a class action against it at the same time it was misrepresenting the benefits of its products. Reason number 2,478 to put a stop to forced arbitration clauses in consumer contracts.
You may be able to file a claim against Lumos Labs, either in arbitration or in small claims court, if you think you were defrauded by their deceptive conduct. In Georgia, you can seek damages for violations of the Fair Business Practices Act, which provides for treble damages and payment of attorney's fees. If you think you were defrauded by Lumos because of their false claims and deceptive advertisements, feel free to contact our offices for a free consultation.