Lumos Labs, the maker of the app Lumosity, hopes to start next year on a new foot after a rocky start to 2016.
At the beginning of the year, after it was repeatedly proven that the “brain training” doesn’t really do much to train brains, Lumos Labs settled Federal Trade Commission charges that they deceived consumers with unfounded advertising claims by paying $2 million in redress.
Lumos Labs also had to notify subscribers of the FTC action and provide them with an easy way to cancel their auto-renewal to avoid future billing. They ended up dishing out about 13,000 refunds, totaling $1.9 million — on top of the settlement payment. But that hasn’t slowed the company down too much.
Steve Berkowitz, CEO of Lumos Labs, as of November 2015, is quoted as saying, “The FTC never had issues with the quality of the product — it was the advertising language. There is disagreement in the research world — but that’s what research is about. There are always open questions.”
He continued by saying that, in an age where information demands more of our minds than ever, Lumosity will continue to be important.
Since the settlement, Lumosity considerably cut down on the number of ads — $541,000 worth, down from $11.8 million in the same period in 2015.
Lumosity has also changed the language it uses in the fewer ads that do end up running. Rather than tout the now-defunct cognitive benefits of the app, advertisements challenge viewers to participate in brain-game competitions. The app now focuses more on developing competition amongst users to keep its player base engaged.
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