Consumers as Stakeholders

False or deceptive advertising under the Consumer Protection Act 2007 includes the use of false, deceptive, misleading or unverified information designed to persuade customers to purchase goods or services. It is included. Advertisements are also considered misleading if they do not disclose important information about the product or service so that consumers can make informed decisions. Scandals have rocked big brands for years. It costs millions of dollars and is tarnished by misleading advertising that contains wild claims such as "guaranteed results" and "scientifically proven." An example of an organization facing false advertising accusations is Lumos Labs. Creator of the Lumosity app.

Discussion

Lumos Labs was charged with false advertising due to unfounded claims that Lumosity games had the ability to aid its users in improving day to day performance and delaying age-related cognitive impairments, Alzheimer’s and dementia. The ads also claimed that Lumosity had the power to reduce cognitive impairments associated with conditions such as PTSD, ADHD and Turner syndrome (Hiltzik). As a result, accusations brought forward stated that the company preyed on the consumers’ fears of age-related cognitive decline by providing false information that scientific studies had proven the benefits of Lumosity which was a false claim as there existed no scientific evidence that it could meet the expectations (Federal Trade Commission). In this case, the accusations were justified because there exists no scientific evidence to support the company’s claim, moreover even after being reproached the company was unable to provide any competent and reliable scientific evidence to back up all its ads as it had previously stated.

The company justified the claims made in its advertisements by providing consumer testimonials on the effectiveness and benefits of luminosity, thereby, proving that product was effective and could meet the customer’s expectations. However, I strongly disagree with Lumos lab’s justification as the company had solicited these testimonials through things such a free iPad, round trip to Francisco and a lifetime subscription of Lumosity (Federal Trade Commission). Therefore, I strongly agree with the accusers that Lumos Labs presented false advertising to increase its sale without having competent as well as reliable scientific evidence.

Works Cited

Federal Trade Commission. “Lumosity to Pay $2 Million to Settle FTC Deceptive Advertising Charges for Its “Brain Training” Program”. (2016). Retrieved From: https://www.ftc.gov/news-events/press-releases/2016/01/lumosity-pay-2-million-settle-ftc-deceptive-advertising-charges

Hiltzik, M. “If you weren't smart enough to know Lumosity was making bogus claims, the FTC has your back”. Los Angeles Times. (2016). Retrieved From: http://www.latimes.com/business/hiltzik/la-fi-mh-if-you-weren-t-smart-enough-20160106-column.html