Lumosity to pay $2M to settle deceptive ad allegations

WASHINGTON (AP) - The developer of Lumosity "brain training" games will pay $2 million to settle federal allegations that it misled customers about the cognitive benefits of its online apps and programs.

The Federal Trade Commission said the company's advertisements deceptively suggested that playing the games a few times a week could boost performance at work, in the classroom and even delay serious conditions like dementia. Under the settlement, Lumos Labs must contact its customers and offer them an easy way to cancel their subscriptions.

The San Francisco company aggressively promoted its service through national TV and radio stations including CNN, Fox News and National Public Radio. The company also used Google advertising programs to drive traffic to its website, the FTC said in a statement.

"Lumosity preyed on consumers' fears about age-related cognitive decline, suggesting their games could stave off memory loss, dementia, and even Alzheimer's disease," said Jessica Rich, a director in FTC's consumer protection unit. "But Lumosity simply did not have the science to back up its ads."

Customers pay anywhere from $15, for a monthly subscription, or up to $300 for a lifetime membership to Lumosity's online and mobile apps.

An FTC spokesman said the action is the first government settlement with a maker of apps intended to boost brain health.

Lumosity is one of the most visible companies in the burgeoning brain training industry, which has estimated sales of over $1 billion per year, according to trade publications.