Skechers to Pay $40 Million for False Advertising

Kim Kardashian's 2011 Super Bowl commercial was among the ads challenged by the FTC. Picture © Glenn Francis,

Last month the Federal Trade Commission announced that Skechers USA, Inc. agreed to pay $40 million to settle charges that the company deceived consumers by making unfounded claims in a variety of advertisements.  The claims made by Skechers that were determined to be unsupported related to advertisements that claimed that Shape-ups would help people lose weight, and strengthen and tone their buttocks, legs and abdominal muscles.  See Stipulated Final Judgment and Order.

Under the Federal Trade Commission Act advertising must be truthful and non-deceptive, advertisers must have evidence to back up their claims; and advertisements cannot be unfair. The FTC will consider an ad deceptive if it contains a statement – or omits information – that is (1) likely to mislead consumers who are otherwise acting reasonably under the circumstances; and (2) material to a consumer’s decision to buy or use the product. The FTC will consider an ad to be unfair if it is: (1) likely to cause substantial consumer injury that a consumer could not reasonably avoid; and (2) not outweighed by the benefit to consumers.

Generally speaking, before a company runs an ad, there should be a reasonable basis (i.e., objective evidence) for the claims made in the advertisement. While the kind of evidence that should be present prior to running an ad will depend on the claims being made, an advertiser must at a minimum have the level of evidence that it claims it has in the advertisement. For example, the statement “Four out of five dentists recommend BRAND TOOTHPASTE” must be supported by a reliable survey that actually shows that 80% of dentists surveyed actually said that they recommend the particular brand in question.

In the situation where an ad makes health or safety claims it must be supported by competent and reliable scientific evidence that has been evaluated by professionals qualified to review the veracity of the claims. Furthermore, in order to ensure claims are truthful any tests or studies conducted to verify the claims that will be made in the advertisement must be conducted using methods that experts in the relevant field accept as accurate.  In other words, tests not accepted as reliable in the relevant expert community cannot be the basis for claims in advertisements.

The claims, some direct and some indirect, that got Skechers into trouble related to health benefits associated with wearing Shape-ups. The FTC complaint charged Skechers with violated federal law by making deceptive advertising claims, including falsely representing that clinical studies backed up the claims. Under the FTC’s settlement, Skechers is barred from making any of the following claims for its toning shoes unless they are true and backed by scientific evidence

“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. “The FTC’s message, for Skechers and other national advertisers, is to shape up your substantiation or tone down your claims.”

The Skechers advertisements challenged by the FTC included a Shape-ups ad claiming that the shoes are designed to promote weight loss and tone muscles. The problematic statements were:  “Shape up while you walk,” and “Get in shape without setting foot in a gym.” The FTC contended that these unsupported claims lead consumers to believe that Shape-ups would provide more weight loss, and more muscle toning and strengthening than regular fitness shoes.  These and other claims would have been acceptable had there been reliable scientific evidence to back up the claims, but no such evidence existed.

Another ad that the FTC challenged was an endorsement from a chiropractor named Dr. Steven Gautreau, who recommended the shoes based on an allegedly independent clinical study he conducted that tested the shoes’ benefits compared to those provided by regular fitness shoes. The FTC alleged that this study did not produce the results claimed.  Moreover, the FTC took issue with the fact that Dr. Gautreau is married to a Skechers marketing executive, which was not disclosed in the advertisement.  Also not disclosed was the fact that the alleged independent study was paid for by Skechers.  How a study paid for by Skechers could in any intellectually honest or straight-face way be considered “independent” is beyond me.  I also suspect that the FTC was exactly right — consumers probably would have really liked to know that this alleged independent doctor was married to a high ranking Skechers employee.  Hardly the type of unbiased assessment it was portrayed to be.

Yet another ad that the FTC took issue with was one featuring celebrities including Kim Kardashian and Brooke Burke, which aired during the 2011 Super Bowl.  In the ad Kardashian is showed dumping her personal trainer for a pair of Shape-ups. In the Burke ad consumers were told that the newest way to burn calories, tone and strengthen muscles was to tie their Shape-ups shoe laces.  Clearly, the message is that you don’t need to work out if you wear Shape-ups, which turns out to be untrue.  What a surprise!  Frankly, I’m not sure that these ads deserved the ire of the FTC.  Did anyone really think that they would be able to just wear a pair of shoes and wouldn’t need to do any exercise in order to tone and strengthen muscles? The goal of federal advertising laws is to protect the reasonable customer, not the careless customer.  Perhaps the overall falsity of the claims made by Shape-ups influenced the FTC.

Consumers who bought these “toning” shoes will be eligible for refunds either directly from the FTC or through a court-approved class action lawsuit, and can submit a claim here.

So why are we talking about false advertising claims here?  Prohibitions against false advertising are also found in the Lanham Act, which defines federal trademark laws.  As a result, false advertising claims are an important part of intellectual property practice for those doing trademark work, particularly trademark litigation.

15 USC §1125(a)(1)(B), states in relevant part:

 Any person who… uses … any false or misleading description of fact, or false or misleading representation of fact, which … misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.

To prevail in a false advertising suit alleging a violation of the abovementioned statute, a plaintiff must prove that: (1) the defendant’s ads were false or misleading; (2) actually or likely deceptive; (3) material in their effects on buying decisions; (4) connected with interstate commerce; and (5) actually or likely injurious to the plaintiff.

The moral of the story is this: tell the truth and don’t be surprised when falsehoods, misrepresentations and deceptive omissions come back to bite you.  Follow the golden rule and you almost certainly won’t have anything to worry about.

IMPORTANT WEASLY LAWYER DISCLAIMER: Of course, as with any generalized advise it is just that — general.  There are a great many rules and laws that pertain to specific advertising situations, such as but not limited to advertising aimed at children, advertising alcohol and tobacco and advertising related to contests or sweepstakes.  Therefore, it is always a good idea to consult with an attorney prior to any new advertising campaign.  The cost of clearing things with your lawyer will be FAR less than having to re-shoot the commercial or throwing away all your advertising materials and starting over.


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Join the Discussion

2 comments so far.

  • [Avatar for marsha]
    June 29, 2012 12:48 pm

    This is just one example of the numerous advertisements out there that push the truth. As a consumer, I don’t look to advertisements as a factual account of the product but more for the comical or visual appeal some commercials bring. However, because of all the deception, I’d rather just do away with them completely. Between keeping up with a family and work at Dish, my free time is too valuable to fritter away on commercials. In fact, I got Dish’s new whole home DVR, the Hopper, specifically for the AutoHop. The feature automatically skips commercials during primetime hours so I can watch my shows without being bombarded with ad after ad (or more like lie after lie). It makes watching TV so much more bearable.

  • [Avatar for Christina Cruz]
    Christina Cruz
    June 18, 2012 03:31 pm

    Being someone who bought shape ups I can tell you that I did not believe they would help me lose weight or I could use them instead of a gym. I bought them for the toning they would give my legs. I bought them when they first came out though so those claims were not being said yet. At the time I had been working at a restaurant for 3 years and wanted to see if they really did work. I actually lost weight in the first month of wearing them. I don’t know if it was because of the shoes of my belief that they would work. Either way I was happy.
    Thank you for the article.