DeVos Invested in Company Under Investigation for Misleading Claims

By Benjamin Herold — August 22, 2017 5 min read
U.S. Secretary of Education Betsy DeVos answers reporters’ questions during her interview with the Associated Press on Aug. 9.
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When U.S. Education Secretary Betsy DeVos increased her family’s financial stake in Neurocore this spring, the controversial “neurofeedback” company was under investigation by an advertising-industry self-regulatory group for making questionable claims about its treatments for such conditions as autism, attention-deficit hyperactivity disorder, and memory loss.

Following a months-long review of the evidence behind Neurocore’s assertions, the National Advertising Division formally recommended in July that the company stop making a wide range of advertising claims and stop promoting many of its user testimonials.

“NAD concluded that the advertiser’s evidence was insufficiently reliable to substantiate [its] strong health-related claims,” according to the group’s 17-page decision. “As a result, NAD recommended that all of the challenged claims be discontinued.”

Neurocore is appealing the decision.

“We stand behind the outcomes we deliver to improve people’s lives,” company CEO Mark Murrison wrote in an email. “From the beginning, we have fully and voluntarily cooperated with the NAD to provide extensive support for the statements we make. We have great respect for the NAD, but we disagree with their decision.”

Betsy DeVos and Neurocore

On February 10, the National Advertising Division alerted Neurocore that it was opening an investigation into the company’s advertising claims.

That was nearly two months before DeVos or one of her immediate family members invested between $1,000,001 and $5,000,000 in the company, according to financial disclosure forms filed with the federal Office of Government Ethics.

DeVos or an immediate family member invested an additional $250,001 to $500,000 in the company in June.

Neither the U.S. Department of Education nor the Windquest Group, a private-equity investment firm that DeVos previously chaired and that her husband still heads, responded to requests for comment.

The National Advertising Division is an investigative unit of the Advertising Self-Regulatory Council, an ad-industry group formed in 1971. The organization aims to promote truth and accuracy in advertising, settle disputes between competing advertisers, and keep government regulators at bay. The ASRC is administered by the Council of Better Business Bureaus.

The NAD typically investigates about 150 cases per year, most of which are prompted by one company complaining about claims made by a competitor. In most years, only a handful of the group’s decisions are appealed.

Neurocore was officially launched in 2006. The company currently operates six “brain-performance centers” in Michigan and Florida. It purports to treat both adults and children by analyzing their brainwaves and other biological signs, then providing “neurofeedback sessions” through which they can train their brains to function better. Neurocore charges as much as $2,200 for a 30-session cycle.

DeVos sat on Neurocore’s board from 2009 until last November. In January, when she was President Donald Trump’s nominee for education secretary, she reported a financial stake in the company worth between $5 million and $25 million. Federal ethics officials signed off on DeVos maintaining that stake. They also signed off on the subsequent investments she made in the company this spring.

A number of neuroscientists and researchers consulted by Education Week, however, have questioned what DeVos’s growing investment in the company says about her commitment to rigorous scientific research.

Targeting ‘Uniquely Vulnerable’ Audiences

A spokeswoman for the National Advertising Division said its lawyers initiated their investigation of Neurocore, in part, because the company’s claims appear to target two “uniquely vulnerable” audiences: families with children suffering from conditions such as ADHD and autism, and seniors suffering from memory loss.

Among the claims made by Neurocore that NAD lawyers reviewed, according to the group’s July decision:

  • “81% of children who come to us on ADHD meds and complete our program are able to reduce or eliminate their use of medications upon program completion.”
  • “Control your anxiety without medication.”
  • “25% reduction in reported symptoms on the autism evaluation checklists.”
  • “Strengthen your brain to fight depression without medication.”
  • “You’ll experience improved memory, as well as better sleep, focus, mood, mental clarity, and overall cognitive performance.”
  • “A natural remedy for migraines.”

As part of its investigation, NAD requested that Neurocore provide evidence substantiating each of its challenged claims, as well as numerous user testimonials promoted on the company’s website.

That information consisted of the company’s analysis of its own internal data and third-party studies of neurofeedback’s use in treating ADHD, anxiety, depression, autism, memory loss, sleep problems, and migraines.

The NAD determined that Neurocore’s internal evidence, which resulted from observational studies rather than clinical trials, “does not provide competent and reliable scientific evidence in support of health-related advertising claims.”

The group also determined that the third-party studies submitted by Neurocore either were not relevant to the specific form of neurofeedback the company uses, or did not provide clear evidence in support of that form of neurofeedback.

And the NAD issued a sharp warning to Neurocore over its use of testimonials that suggest clients “have reduced or eliminated the need for medication for ADHD, anxiety, depression, memory problems, migraines, or sleep disorders.”

What happens next

The nonprofit group Truth in Advertising Inc. has compiled its own database of what it says are more than 100 examples of Neurocore making questionable advertising claims.

The group’s executive director, Bonnie Patten, said the National Advertising Division’s “strong case” against the company makes Education Secretary DeVos’s financial stake in Neurocore particularly troubling.

“She is giving credibility to a company that may not deserve it,” Patten said.

Neurocore’s appeal of the NAD’s decision will be heard by a five-member panel convened by the National Advertising Review Board, which is also a unit of the Advertising Self-Regulatory Council.

If the panel sides with NAD, Neurocore will again be asked to stop making the advertising claims and using the testimonials that were deemed unsubstantiated.

If the company does not comply, the case will be referred to the Federal Trade Commission.

See also:

A version of this news article first appeared in the Digital Education blog.