For overweight Americans, and those looking for a healthier lifestyle, the claim was almost too good to be true -- wear Skechers Shape-ups footwear and watch the pounds melt away. At a news conference Wednesday, the Federal Trade Commission said the shoemaker's claims weren't true and alleged Skechers violated federal law by misleading consumers.
According to the FTC, Skechers agreed to pay a hefty $40 million fine to settle charges the California-based 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 company enlisted high profile celebrities Kim Kardashian and Brooke Burke to sell the shoes.
Besides Shape-ups, Skechers also made deceptive claims about other products including Resistance Runner, Toners and Tone-up shoes, the FTC alleges.
"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.
As part of the settlement, customers who bought Skechers "toning" shoes will be eligible for refunds either directly from the FTC or through a court-approved class action lawsuit, officials said.
Wednesday's announcement was the culmination of a months-long investigation involving the FTC and attorneys general from 44 states and the District of Columbia.
FTC officials highlighted a Skechers television ad featuring the endorsement of chiropractor Dr. Steven Gautreau. In the ad Gautreau cited an "independent" clinical study he conducted testing the shoes' benefits.
The FTC said the study results Gautreau promoted weren't factual, and alleged the company hid the fact that Gautreau is married to a Skechers marketing executive. The FTC also said Gautreau was compensated for his endorsement, which wasn't made clear in the commercial.
Skechers introduced Shape-ups in 2009, and sales peaked a year later. The FTC called Skechers an industry leader in the booming business of toning footwear. Estimated sales were close to $1 billion industrywide in 2010, the FTC said. The toning shoes Skechers sold cost between $60 and $100 a pair.
As part of an expensive campaign to promote the fitness benefits of Shape-ups, the company unveiled a scantly dressed Kim Kardashian peddling the shoes during the Super Bowl in 2011.
Brooke Burke's ads claimed the shoes would help improve her cousin's posture, mother's legs and give her brother a tighter core. Additionally, Burke's ad told consumers "the newest way to burn calories and tone and strengthen muscles was to tie their Shape-up shoe laces," the FTC said.
"The FTC's message, for Skechers and other national advertisers, is to shape up your substantiation or tone down your claims," Vladeck said.
Under the FTC's settlement, the company is barred from any advertising making similar claims unless it's backed up by scientific evidence.
What Skechers plans to do with the Shape-ups brand remains to be seen. An ad featuring Burke touting "the next generation of Shape-ups" remained on the company's website Wednesday morning.
According to the FTC, the commission files a complaint when it has "reason to believe" that the law has been or is being violated. The FTC says despite Skechers agreement to pay a fine, the complaint is not a court ruling or an admission that the company violated any law.