One of the most popular (and most marketed) online services of the past few years has been Lumosity. This company has been running ads on television shows, Facebook, a variety of websites and much more. They even had a popular affiliate program to attract more marketers to drive increased sales. By all accounts, they have been very successful. There is just one problem. They were apparently lying about what their services could do, and now the FTC has fined them $2 Million for this deception.
The FTC’s Bureau of Consumer Protection Director, Jessica Rich, said in a statement about this case that, “Lumosity preyed on consumers’ fears about age-related cognitive decline, suggesting their games could stave off memory loss, dementia, and even Alzheimer’s disease, but Lumosity simply did not have the science to back up its ads.”
The service was quite popular, with more than 60 million users. Many of these users were paying the $120 per year fees (or some other subscription to their service) which helped to make Lumosity a significant amount of money.
At this point it is not clear what the FTC will be doing with the $2 million fine they issued. Those who have signed up for Lumosity’s auto-renewal program anytime from January 1st, 2009 through December 31st, 2014 will need to be notified about the action taken by the FTC, and they will be provided with an easy way to cancel the service.
This is just one more example of how important it is for marketers to use honest business practices to get their customers, and not just say what people want to hear.