Skechers agrees to pay $50 million for false advertising of its Shape-Ups shoes
July 6, 2012
This article was written for and first featured in Fashion Capital.
On 16 May 2012, Skechers USA Inc. agreed to pay $50 million to settle false advertising allegations made by the Federal Trade Commission (FTC) in relation to Skechers’ Shape-Ups.
The allegations were that Skechers had made false and unsubstantiated claims in high profile ads that people who wore the shoes would lose more weight and gain more muscle tone than they would with regular fitness shoes. The FTC said that research studies cited by Skechers had defects, including incorrectly reporting results.
This settlement comes only a few months after Reebok International Limited announced a $25 million settlement with the FTC over similar unsubstantiated claims about the exercise benefits of its EasyTone shoes. The FTC said that these claims included that EasyTone shoes had been proven to lead to strength and tone improvements of: 28% in buttock muscles, 11% in hamstrings and 11% in calf muscles over regular walking shoes.
Reebok and Skechers are now banned from making claims about the benefits of their toning shoes in the US unless they are true and backed by scientific evidence. Most of the settlement money in both cases will be used to provide refunds to consumers who had paid up to $100 a pair for Shape-Ups or EasyTones.
Reebok’s problems were not limited to the FTC’s actions in the USA. In December 2010, two complaints were made to the Advertising Standards Agency (ASA) stating that the efficacy claims for EasyTone were misleading and could not be substantiated. Reebok had relied upon third party studeies for such claims.
These complaints were upheld. The ASA stated that the study, which was deemed not to be on an adequately sized sample size, was therefore not “robust, scientific evidence to support the efficacy claims” made by Reebok.
The ASA’s action was to order Reebok not to broadcast the advertisement in that form again as it was misleading, which Reebok has complied with.
The ASA’s decision shows its strict approach to the content of advertisements in the UK and its early decisive action meant most customers in the UK that did purchase the products did so on a different basis than those in the US. ASA has broad powers to penalise advertisers and also if it deems it necessary will refer the advertiser to the Office of Fair Trading for further legal proceedings about claims.
The lesson from these actions, applicable both in UK and US, is to take care when commissioning research to ensure that it is able to withstand objective scrutiny in addition to supporting the claims made. Otherwise, you may not only face exposure but also end up losing money expended on unused advertising.