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Smarter, Stronger, Faster: FTC Cracking Down on Deceptive Health-Related Advertising

In recent years, brands have become bolder in their representations to consumers. Our product is the safest. Our product is totally natural. Our product will make you smarter. However, the FTC is cracking down on instances of deceptive advertising, leaving businesses, marketers and advertisers to either dial back their embellishments or face steep financial punishments. One of the more interesting FTC settlements of 2016 was that involving brain training app, Lumosity. The FTC’s recent action against Lumosity is consistent with its aggressive approach toward enforcing the rules on false or misleading advertising, particularly where it involves claims of improved physical or cognitive health.

Lumosity is a popular website that touts using on-line games and related activities to boost mental acuity and performance in a variety of settings, including school, work and athletics.  The company also has made claims that it can delay or mitigate the onset of age-related cognitive decline, as well as other health conditions affecting cognitive function and mental ability. 

The FTC filed an action against Lumos Labs, Inc., which owns the website, claiming that it falsely promoted the benefits of its product without scientific support and used customer endorsements and testimonials without informing the public that some of the authors were solicited and compensated with prizes in violation of Section 5 of the FTC Act. 

“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, Director of the FTC’s Bureau of Consumer Protection, in a news release. “But Lumosity simply did not have the science to back up its ads.”

As part of the proposed settlement with the FTC, Lumosity must have “competent and reliable scientific evidence” before making future claims about the effectiveness of its product. In addition, the order imposes a $50 million judgment against the company that will be suspended after the company pays $2 million to the commission.

The consumer protection agency has increasingly cracked down on apps making vague, health-related claims without having the science to back them up. For example, in 2015, the FTC targeted the makers of two apps that claimed they could help detect cancerous moles. Similarly, a company that claimed its app could improve vision agreed to settle deceptive advertising charges brought by FTC.

The implications of the Lumosity settlement, and other recent FTC investigations, extend beyond government enforcement actions (which clearly pose serious problems for advertisers and their clients), and extend to potentially high stakes civil class actions involving a panoply of claims and remedies. Civil actions typically include claims for: (1) unfair competition in violation of California’s Business and Professions Code Section 17200, (2) false and misleading advertising in violation of the same statute, (3) violation of California’s Consumer Legal Remedies Act (Civil Code Section 1750, et seq.), (4) breach of contract, and (5) unjust enrichment.  Recovery under one or more such claims not only carries the risk of high damage awards, but also injunctive relief that could degrade, if not destroy, a defendant’s ability to compete.

If you are a brand that touts the positive effects of your product, health or otherwise, you should confer with qualified counsel to ensure that your marketing campaign complies with federal and state law. Consumer advocates and government agencies are on the lookout for false or misleading promises. 

This blog post is not offered as, and should not be relied on as, legal advice. You should consult an attorney for advice in specific situations.