Feds: Skechers Made False Claims About Shape-ups Toning Shoes, Must Offer Refunds

The SoCal company agreed to a $40 million settlement, consumer refunds over false-advertising allegations

Physical fitness doesn't come quite as easily as the makers of some athletic shoes have promised, according to the federal government, which has settled with another footwear company over false advertising claims.

Manhattan Beach-based Skechers will have to pay a $40 million settlement for promises it made to consumers of its Shape-ups shoes, the funny-looking sneakers with the curved soles that promised wearers a fitter figure. The settlement funds will be used to offer buyers of the so-called "toning" shoes refunds of up to $80 per pair.

Advertisements told consumers that they could “Get in Shape without Setting Foot in a Gym," the Federal Trade Commission said in announcing the settlement Wednesday.

The shoes, which cost up to $100, were the subject of advertisements featuring celebrities such as Kim Kardashian and "Dancing With the Stars" co-host Brooke Burke. A 2011 ad that aired during the Superbowl showed Kardashian leaving her personal trainer for a pair of Shape-ups.

The settlement follows a similar $25 million deal last year with Reebok, which made a shoe like the Skechers Shape-ups.

As with the Reebok settlement, Wednesday's deal allows buyers of the Skechers shoes to apply for a refund of up to $80 for shoes purchased after Aug. 1, 2008. Consumers can find out more about applying for a refund -- which will come either directly from the FTC or via a class-action lawsuit -- at www.ftc.gov/skechers.

"Skechers’ unfounded claims went beyond stronger and more toned muscles. The company even made claims about weight loss and cardiovascular health," said David Vladeck, director of the FTC’s Bureau of Consumer Protection, 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 settlement also applies to claims that Skechers made about its Resistance Runner, Toners, and Tone-ups shoes.

The company was the "market leader" in the "toning footwear" category, according to the FTC.

The settlement comes after a complaint filed by FTC attorneys that alleged the company violated federal law by making deceptive advertising claims, including falsely representing that clinical studies backed up the claims.

Among other allegations, the FTC said the company promoted an endorsement from a chiropractor whose recommendation was based on an "independent" clinical study. The study's results were misrepresented, the FTC said, and the chiropractor was paid by Skechers and was married to a Skechers executive.

In a press release Wednesday, Skechers denied the federal government's allegations, but said the company had settled to "avoid protracted legal proceedings" and to save future legal costs.

"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."

The company will continue to make and sell toning shoes, Skechers said.

"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, in the press release.

The settlement is part of a broader agreement also announced Wednesday that resolves investigations in 44 states and the District of Columbia.

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