WASHINGTON (Reuters) - Online game provider Lumosity has agreed to pay $2 million to settle allegations that it made unfounded claims that its games reduce or delay intellectual impairment that comes with age, the Federal Trade Commission said on Tuesday.
Lumosity had advertised that its suite of games, which it sells through subscription apps, could also help students learn better and improve athletic performance, the FTC said.
"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. "Lumosity simply did not have the science to back up its ads."
The apps, which were advertised on National Public Radio, CNN, Fox News, Pandora and others, cost $14.95 per month, the agency said.
Lumosity, a unit of Lumos Labs, said the settlement will allow the company to move on, and said the FTC's complaint was "a reflection of marketing language that has been discontinued."
The $2 million paid by Lumosity will be used to refund consumers, the FTC said.
The San Francisco-based company, which was formed in 2005, has 70 million users in 182 countries, the company says on its web site.
The company was also criticized by the FTC for failing to disclose that it had given prizes, including a trip to San Francisco, for consumers who gave testimonials for the product, the FTC said.
(Reporting by Diane Bartz; Editing by Dan Grebler)