WASHINGTON - The Federal Trade Commission said Wednesday that Skechers agreed to pay $40 million to settle charges 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, says David Vladeck, director of the FTC's Bureau of Consumer Protection.
The announcement comes eight months after Reebok settled similar FTC charges for $25 million. Skechers had acknowledged in an FTC filing that it was being investigated by the FTC. Vladeck said Skecher's settlement was larger, in part, because it has more market share in toning sneakers.
Skechers was the market leader in the toning footwear category. Its Shape-ups, introduced in April 2009, cost consumers about $100 a pair. Resistance Runner, Toners, and Tone-ups were sold starting in mid-2010 for $60 to $100 a pair.
Under the settlement, Skechers will be barred from making unsubstantiated claims about the health and fitness benefits of Shape-ups and related footwear. The commission alleged Skechers also made deceptive claims about its Resistance Runner, Toners, and Tone-ups shoes.
Along with singling out deceptive ads, such as Super Bowl ads featuring Kim Kardashian and Brooke Burke, the FTC said research underlying the claims was suspect.
A chiropractor named Steven Gautreau recommended the product based on a clinical study he claimed was "independent" and tested the shoes' benefits compared to regular fitness shoes, the FTC said. The study did not produce the results claimed in the ad, the FTC said.
In addition, Skechers failed to disclose that Gautreau is married to a Skechers marketing executive and Skechers paid him to do the study, the FTC said.
The Skechers sneakers didn't just fail to live up to their purported fitness claims, the FTC says. They they may have had the opposite effect.
Consumers not only "didn't lose weight, they gained weight," says Vladeck.
Consumers who bought any of the Skechers sneakers covered by the settlement can learn more and file for a refund at ftc.gov/Skechers.