A recent $2 million settlement with Lumosity is only one of four cases the Federal Trade Commission has brought in the past year. Expect to see many more to come in the future.

The Federal Trade Commission’s $2 million settlement this week with brain-training site Lumosity could signal more regulatory scrutiny of the $1.3 billion market, which ranges from Lumosity’s word games and brain twisters to $15,000 retreats. In just the past year, the FTC has brought deceptive-marketing cases against four cognitive companies providing such services. “Cognitive training products and claims are of significant interest to the FTC,” says a spokesman for the agency.

FTC commissioner Julie Brill felt strongly enough about the Lumosity case that she issued a separate statement expressing her personal concern about brain training. Brill included a warning: “I caution Lumosity and other companies about making representations that overstate the benefits of these products or misleadingly imply that improvements in the game setting transfer to real-world benefits.”

Scientists have long questioned the claims made by such companies. Last fall, more than 70 neuroscience and psychology professors from such institutions as Stanford and Harvard signed a document objecting to claims by brain training companies—which the professors say lack compelling evidence—that consumers can reduce or reverse cognitive decline. (In November, Fortune examinedquestions regarding the newest frontier in brain-training: electronic devices that purport to improve focus, calm the mind, or even make you smarter.)

In the case of Lumosity, the FTC’s complaint alleged that it made unsubstantiated claims about its 40 brain games, which Lumosity said could improve everyday cognitive performance, delay age-related cognitive decline, dementia, and Alzheimer’s disease and even help cognitive impairment from cancer treatment and brain injuries. The FTC asserted that Lumosity also failed to disclose that some testimonials were solicited with prizes and that the company used Google Adwords to “prey on consumers’ fears about age-related cognitive decline, suggesting their games could stave off memory loss, dementia, and even Alzheimer’s disease.”

Lumos Labs, the parent company of Lumosity, did not admit or deny the FTC’s allegations, but the company says it has long since abandoned the use of disease-related terms in its search ad campaigns and has removed many of the controversial claims from its site.

Lumos Labs otherwise is defending its practices. The company notes that the FTC did not challenge claims that Lumosity improves cognition. And Lumos Labs says it won’t stop what it calls “rigorous research” exploring the link between brain training and staving off cognitive decline. Although the FTC reduced the $50 million judgment because Lumos Labs could afford to pay only $2 million, the company maintains it’s in a strong financial position to continue investing in new cognitive research and services to its 70 million subscribers.

Backed by $67.5 million from investors since its start in 2005, Lumos Labs says it’s spearheading an effort to create research standards for better measuring the efficacy of cognitive training. The company says the settlement doesn’t “pertain to the rigor of our research or the quality of our products.” Says Lumos Lab CEO Steve Berkowitz: “We are at the forefront of a new and rapidly innovating field. There’s a lot of research that has been done but there is a lot more that can be done.”

Still, skepticism abounds among scientists. The scientific community wants to see research that is published in peer-reviewed journals, says Thomas Redick, a cognitive psychology researcher at Purdue University. He adds that studies should employ control groups and the findings should be replicated by outside scientists. The results should also be based on testing participants before and after the training, rather than relying simply on self-reporting by participants, he says.

That, according to the FTC’s complaint, is precisely what was lacking in the evidence Lumos Labs cites. The company lists myriad studies on its website, but the vast majority were conducted by its in-house research team and more than 100 research collaborators. In Redick’s view, internal studies presented at conferences simply aren’t credible enough.

Lumos Labs recently reworked its website to present one study on its homepage that seems to meet Redick’s criteria. That study reported that people who did Lumosity games scored better on short-term memory, working memory, and problem-solving than those who did crossword puzzles.

It may be perhaps the most rigorous study from Lumosity, says Redick of Purdue. “It used a large sample [4,715 participants], an active control group and made the datasets available,” he says. But, he notes, the sample of participants were drawn from existing Lumosity account holders, which makes it difficult to control placebo effects and expectations.

“I don’t see much evidence that Lumosity does more than make you a little better on tasks that are identical to, or similar to, the training tasks themselves,” Redick. More research is needed, he says, using bigger samples, stronger control groups, and random assignment. Lumos Lab officials say they plan to do that. Till then, it seems, the jury will still be out on the company’s claims.

Image Credit: Thomas Haynie
Article via fortune.com