The Federal Trade Commission announced today that Skechers has agreed to pay $40 million to settle false advertising charges that, as to USA Today puts it, "mislead consumers with claims that its toning sneakers would do everything from help them lose weight to make their 'bottom half their better half' without ever going to a gym."
The settlement, which will be used to provide refunds to buyers of Shape-ups and other Skechers toning sneakers, is believed to be the FTC's largest ever involving consumer refunds, David Vladeck, director of the FTC's Bureau of Consumer Protection, told USA Today.
“Skechers’ unfounded claims went beyond stronger and more toned muscles. The company even made claims about weight loss and cardiovascular health,” stated Vladeck in a press release. “The FTC’s message, for Skechers and other national advertisers, is to shape up your substantiation or tone down your claims.”
The announcement follows Reebok's $25 million settlement in September following similar FTC charges regarding its toning shoe marketing claims. Skecher's settlement was larger than Reebok's, Vladeck told USA Today, because it has a bigger slice of U.S. market share for toning sneakers. Skechers' toning shoes were promoted with celebrity endorsements by Brooke Burke, Joe Montana and Kim Kardashian (in a 2011 Super Bowl commercial).
Skechers issued a press release responding to the settlement in which it denied the allegations and said it intends to continue selling the toning shoes, even if it can't make any health-related marketing claims unless "true and backed by scientific evidence," as the FTC states. The agency has set up a website for any Skechers customer wishing to apply for a refund for their toning shoe purchase, which the FTC's Vladeck highlighted in a press conference:
The shoe brand responded to the FTC settlement in a press release that stated in part:
Skechers denies the allegations and believes its advertising was appropriate, but has decided to settle these claims in order to avoid protracted legal proceedings. The one-time settlement is expected to result in substantial net savings for the Company compared to the significant long-term cost of defending against multiple regulatory and civil legal proceedings in numerous jurisdictions. The Company will not be paying any fines or penalties.
"While we vigorously deny the allegations made in these legal proceedings and looked forward to vindicating these claims in court, Skechers could not ignore the exorbitant cost and endless distraction of several years spent defending multiple lawsuits in multiple courts across the country," said David Weinberg, the Company's Chief Financial Officer. "This settlement will dispose once and for all of the regulatory and class action proceedings. While we believe we could have prevailed in each of these cases, to do so would have imposed an unreasonable burden on the Company regardless of the outcome."
Weinberg continued: "Our Company's goal has always been and will continue to be designing and selling quality, affordable shoes for our loyal customers. In short, we settled to avoid the cost and distraction of protracted legal battles so we could get back to doing what we do best."
Shoes that employ toning technology have been sold in the United States for more than 15 years and have been the subject of numerous research projects with at least 19 reports published in peer-reviewed clinical and sports medicine journals. Researchers from around the world have analyzed various models of toning shoes and found demonstrable fitness benefits from walking and standing in such shoes, as compared to flat-bottomed athletic footwear.
The settlement strictly relates to certain advertising and related claims and does not prevent or prohibit Skechers from making and selling the toning shoes, which the Company will continue to do. "The Company fully stands behind its toning shoe products and technology and is permitted under the settlement to continue to advertise that wearing rocker-bottom shoes like Shape-ups can lead to increased leg muscle activation, increased calorie burn, improved posture and reduced back pain," said Michael Greenberg, President of Skechers.
Greenberg continued, "The Company has received overwhelmingly enthusiastic feedback from literally thousands of customers who have tried our toning shoes for themselves and have written unsolicited testimonials about their positive experiences--not just with our products' exercise benefits, but also with their well known comfort and style. We remain committed to the continued development of our toning shoe products, and will continue to deliver quality products that our customers love."
Below, Skechers' endorsements featuring Burke and Montana: