By Barry Janoff
May 16, 2012: The Federal Trade Commission said Wednesday that Skechers USA, Inc. has agreed to pay $50 million to settle charges that the company "deceived consumers by making unfounded claims that Shape-ups would help people lose weight, and strengthen and tone their buttocks, legs and abdominal muscles."
The FTC also busted Skechers for "falsely representing that clinical studies backed up the claims."
The misrepresented claims came in TV, print and Internet advertising. According to the FTC, that included an extensive campaign featuring Kim Kardashian, highlighted by a TV spot that aired during Super Bowl XLV in which she traded her trainer for a pair of Shape-ups.
Skechers' Shape-ups "Get Back In The Game" marketing featured Joe Montana, Karl Malone, Wayne Gretzky, Kareem Abdul-Jabbar and Brooke Burke. A Skechers commercial that aired during Super Bowl XLIV featured Montana's voice but not his image.
The FTC complaint did not cover GoRun, a line that Skechers launched around Super Bowl XLVI this year with a TV spot featuring a French bulldog named Mr. Quiggly.
Of the money from the settlement, $40 million will go toward customer refunds. The FTC has set up a Web site and a Hot Line (866-325-4186) for consumers to determine whether or not they are eligible for a refund and for what amount. In addition, $5 million will be used to settle state allegations and $5 million will be used to pay class-action legal fees.
The FTC said in a statement that the Huntington Beach, Calif.-based Skechers "made unsupported claims that Shape-ups would provide more weight loss, and more muscle toning and strengthening than regular fitness shoes." Skechers also made deceptive claims about its Resistance Runner, Toners and Tone-ups shoes, according to the FTC.
“Skechers’ unfounded claims went beyond stronger and more toned muscles," David Vladeck, director of the FTC’s Bureau of Consumer Protection, said in the statement. "The company even made claims about weight loss and cardiovascular health. The FTC’s message, for Skechers and other national advertisers, is to shape up your substantiation or tone down your claims.”
Among the unfounded claims, according to the FTC, were Shape-ups' ads that came with an endorsement from a chiropractor, Dr. Steven Gautreau. According to the FTC, Gautreau "recommended the product based on the results of an 'independent' clinical study he conducted that tested the shoes’ benefits compared to those provided by regular fitness shoes."
According to the FTC, "This study did not produce the results claimed in the ad, that Skechers failed to disclose that Dr. Gautreau is married to a Skechers marketing executive and that Skechers paid Dr. Gautreau to conduct the study."
The FTC said that the settlement "is part of a broader agreement . . . resolving a multi-state investigation, which was led by the Tennessee and Ohio Attorneys General Offices and included attorneys general from 42 other states and the District of Columbia."
According to the statement released by the FTC, Skechers "was the market leader in the toning footwear category. Industry shoe sales peaked in 2010, with sales close to $1 billion. Shape-up fitness shoes, which Skechers introduced in April 2009, cost consumers about $100 a pair. Resistance Runner, Toners, and Tone-ups became available in mid-2010, and retailed for $60 to $100 a pair."
Under the FTC’s settlement, Skechers can still sell and market Shape-ups but is barred from making any of the following claims for its toning shoes unless they are true and backed by scientific evidence:
• Claims about strengthening
• Claims about weight loss
• Claims about any other health or fitness-related benefits from toning shoes, including claims regarding caloric expenditure, calorie burn, blood circulation, aerobic conditioning, muscle tone and muscle activation.
The settlement also bars Skechers from misrepresenting any tests, studies, or research results regarding toning shoes.