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FTC Orders 'Brain Training' Company Lumosity to Pay $2 Million Over Deceptive Advertising Practices 'Lumosity simply did not have the science to back up its ads,' said the FTC's director of consumer protection.

By Laura Entis

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Lumosity | Enhanced by Entreprenuer

Lumosity, the online brain training company, has quite the seductive pitch: If you want to sharpen your mental focus and stave off dementia and Alzheimer's, just start playing a series of its mobile and online games.

It may not be that easy, sadly.

Today, the Federal Trade Commission announced Lumos Labs, the company that developed Lumosity, will pay the agency $2 million for deceiving consumers with unfounded claims that its products can help improve work and school performance, as well as reduce or delay cognitive decline associated with aging.

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

Related: Leading Scientists Question 'Brain Games' Effectiveness, Call for More Research

The order from the FTC also imposed a $50 million judgment against Lumos Labs (which was dropped, since the company doesn't have enough money to pay), along with the promise that it will notify subscribers of the action and make it easy for them to cancel their subscriptions.

In a statement to Entrepreneur, Lumos Labs said it stands behind its practices:

"Neither the action nor the settlement pertains to the rigor of our research or the quality of the products — it is a reflection of marketing language that has been discontinued. Our focus as a company has not and will not change: We remain committed to moving the science of cognitive training forward and contributing meaningfully to the field's community and body of research."

Before the FTC stepped in, Lumosity was advertising its games' ability to improve cognition on radio and TV. It also used Google Adwords, purchasing keywords such as "Alzheimer's," "dementia" and "cognition," so when a consumer searched for a medical term they could be served a Lumosity ad, the FTC alleges.

Related: Music as Medicine? The Sexy Idea with a Non-Sexy Timeline.

The order bars Lumosity from making claims that its games improve cognitive performance or stave off cognitive decline without first collecting scientific evidence from randomized, blinded and independent trials. It also suggests that if Lumosity does intend to validate these claims, its games will be classified as a drug and must therefore be approved by the Food and Drug Administration.

It's an important move, one that will have a ripple effect across the lucrative "brain game" industry that -- despite concerns from prominent psychologists, cognitive scientists and neuroscientists-- has been operating without much regulatory oversight for years.

In the future, if a mobile or online game company wants to position itself as a way to boost memory of any other aspect of cognitive performance, it will likely need rigorous scientific validation to back it up -- and quite possibly, approval from the FDA.

It's a model that is already being explored. Akili, a Boston-based video game startup, is currently working with the FDA to validate one of its games as a diagnostic and cognitive tool for ADHD.

Related: Meet Color Genomics, the Startup That Wants to Make Genetic Testing Less Expensive

Laura Entis is a reporter for Fortune.com's Venture section.

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