Lumosity sold brain games as dementia prevention — the FTC fined it $2M for the ads

Lumosity was the most famous brand in 'brain training': 40 games sold by subscription from $14.95 a month up to $299.95 for life. Its ads claimed the games could help users perform better at work and in school, delay age-related cognitive decline, and protect against mild cognitive impairment, dementia and even Alzheimer's disease — and that scientific studies proved these benefits.

On January 5, 2016 the FTC charged that the marketing was deceptive advertising. '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 the director of the FTC's Bureau of Consumer Protection. 'But Lumosity simply did not have the science to back up its ads.' The FTC entered a $50 million judgment against Lumos Labs, then suspended all but $2 million of it because of the company's financial condition — the $2 million was paid as consumer redress.

Lumos Labs disputed the framing, saying the settlement 'is a reflection of marketing language that has been discontinued' and that the action did not pertain to the rigor of its research. The order still bound the company: future claims about real-world performance, age-related decline or health conditions now had to rest on 'competent and reliable scientific evidence,' and subscribers who had signed up for auto-renewal between January 2009 and December 2014 had to be notified of the action and given a way to cancel.