FTC Orders Reebok to Pay $25 Million Over Toning Shoe Ads

The Federal Trade Commission has ordered Reebok International to pay $25 million in consumer refunds for claiming its "toning shoes" would give wearers stronger butts and better legs.

According to the FTC, the athletic shoemaker lacked scientific proof to back up claims it made about its EasyTone and RunTone shoes (which sell for about $80 to $100 a pair), such as walking in the shoes will lead to 28% more strength and tone in the buttock muscles than regular sneakers.

“Consumers expected to get a workout, not worked over,” said David Vladeck, director of the FTC’s Bureau of Consumer Protection, at a press conference today. “The evidence was wholly insufficient to support the objective claims [Reebok] was making.”

The FTC today filed both a lawsuit and proposed settlement in Ohio federal court, claiming that Reebok’s advertising was false and deceptive in violation of sections 5 and 12 of the FTC Act.

The settlement, which is subject to court approval, requires Reebok to deposit $25 million into an escrow account within 15 days. Consumers can apply for refunds, and any money that remains goes to the U.S. Treasury as disgorgement. Reebok must also cease making claims about the health benefits of its shoes unless they’re backed up by at least one well-controlled human clinical study.

Reebok in a statement said it settled “in order to avoid a protracted legal battle....Settling does not mean we agreed with the FTC’s allegations; we do not. We fully stand behind our EasyTone technology.”

The overall market for toning shoes - described as the newest trend in footwear - was close to $1 billion in 2010, according to the complaint. Vladeck declined to say if other manufacturers are under investigation for making false claims about their shoes.

Reebok was represented by its associate general counsels Sarah Stuart and Keith Wexelblatt and outside counsel Douglas Wood, John Hooper and Keri Bruce of Reed Smith.

FTC lawyers who worked on the case include Dana Barragate, Larissa Bungo and Michael Milgrom, who are based in the agency’s Cleveland office.

Comments

[Jenna Greene]

For information about applying for refund, see
http://www.ftc.gov/bcp/cases/reebok/index.shtm

[Myrna Ruiz]

I have a pair of reebok that i bought in Plaza Las Americas, Puerto Rico, what I am suppose to do to be part of this settlement?, thanks

[Ian Bourgoine]

Caveat emptor is a legal rule, not a "notion" that just means whatever you want it to mean (which is, apparently, everything). Caveat emptor is a contractual rule and has nothing to do with mispresentations in advertising. See, Principles of the Laws of Contracts, 245. Misrepresentations in advertising are handled by the FTC and state statutes. You, sir, do not know what you are talking about.

You second "notion" is also wrong. As you well know, debates and PR Reps on morning talk shows would do nothing to stop fraudulant misrepresentations in the marketplace.

Company "A" says its product does something that it does not do. Consumers purchase it based on the false statement. Company "A" makes a millions of dollars. Then, rather than have the FTC or "parasite" lawyers demand the money back through the judicial system, you want the punishment for company "A" to be what?!! That's right, "...putting a spokesman on morning TV."

I am sure Company "A" would not continue to do the same thing over and over and over again just because it is profiting from false statements, right? Wrong, company "A" is making money. The stock price is rising. The fraud does not stop.

But of course, if you think the consumers are stupid and deserve to be lied to, Company "A" gets a pass anyway. I guess Darren McKinney, in his infinite wisdom, would decide when consumers should just "know better" than to believe the fraud. How is the weather up there on your high-horse?

The real problem with your notion, sir, is that your argument hurts the very people you want most to protect: the manafacturers. When there is no punishment for fraudulation misrepresentations in advertisements, it breeds more fraud because more and more companies make money via the false statements. When this happens, the consuming public loses faith in the marketplace and stops making purchases of various products.

Indeed, the consumer loses trust in the seller and stops buying things based on what the commercials tell them they need and want. And at a time of souring national debt, job losses, and a weak private economy, do we really want to undermine consumers' confidence in the messages in advertising? That's right, sir, fraudulant misrepresentations in advertising (if left unchecked) hurt the marketplace by undermining consumers' confidence in advertising and in purchasing the advertised products. And when consumers stop buying, manafacturers stop making, retailers stop selling, and our economy grinds down even lower.

But with your solution, at least we get good morning TV...maybe.

[Walt_K]

"Reebok must also cease making claims about the health benefits of its shoes unless they’re backed up by at least one well-controlled human clinical study.

Reebok in a statement said it settled 'in order to avoid a protracted legal battle....Settling does not mean we agreed with the FTC’s allegations; we do not. We fully stand behind our EasyTone technology.'”

Are they already violating the terms of the settlement?

[Darren McKinney]

Whatever happened to the notion of "caveat emptor," for crying out loud? What idiot could possibly believe for a moment that a marginally convex sneaker sole was going to tone anything on his overly fed body?

If consumers are willing to buy such marketing come-ons and are content with their purchases of products that pose no public health or safety risk, why in the world is the government wasting tax dollars, ginning up still more victimhood-promoting litigation that bleeds capital from more productive applications, such as growing the economy and creating jobs?

When personal injury lawyers gin up such lawsuits, we all understand -- that’s what parasites do. But with an overarching need to rein in its deficit spending and help revive our private sector economy before a double-dip recession begins, the government’s dogged pursuit of this type of case is unfathomable.

Again, in the absence of an actual threat to public health or safety, couldn’t the FTC simply hold a news conference and/or send out a few spokespersons to the morning shows to challenge or refute dubious marketing claims? By all means, use a few tax dollars to educate the public. But government shouldn’t and can’t afford to wage costly litigation every time one or more gullible consumers make foolish footwear decisions.

Darren McKinney
American Tort Reform Association