Skechers has agreed to pay $45 million to settle charges that it violated federal laws because of the deceptive claims made to consumers in their toning shoe advertisements, according to the Federal Trade Commission. The advertisements were for Shape-ups, Resistance Runner, Toner and Tone-ups shoes and included statements such as “Get in Shape without Setting Foot in a Gym” and “Shape Up While You Walk.” The advertisements also claimed that the shoes are designed to promote weight loss and tone muscles. Consumers who purchased these specific shoes will be eligible for a refund from the FTC.
In addition to the $40 million Skechers will pay the FTC, the other $5 million will be paid to the 44 states and D.C. that were involved in the multistate investigation. It will also pay $5 million in class-action attorneys’ fees to settle the domestic advertising matters and related claims on a global basis, bringing the total cost to $50 million.
As a result of the settlement agreement, Skechers is barred from making advertising claims about strengthening, claims about weight loss and 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.
FTC is taking these advertising claims very seriously, as demonstrated by the $25 million settlement Reebok International Ltd. made last year, who was also charged with making false advertising claims on its toning products.
Skechers has denied the allegations, but settled to “avoid protracted legal proceedings.” Skechers has already been involved in several legal proceedings brought by by the FTC, multiple states’ attorneys general and consumer class action lawyers.
David Weinberg, the company’s chief financial officer, said, “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.”
This settlement is not expected to impact the company. In fact, they already reported better-than-expected first-quarter results.