The settlement with the FTC is part of a broader agreement that was also announced Wednesday resolving a multistate investigation, which was led by the Tennessee and Ohio Attorneys General offices and included attorneys general from 42 other states including Pennsylvania and the District of Columbia.
In addition to $40 million for consumer refunds, the states will split an additional $5 million of which Pennsylvania will get $143,000.
An FTC official said Skechers' 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, adding: "The FTC's message, for Skechers and other national advertisers, is to shape up your substantiation or tone down your claims."
Skechers' CFO David Weinberg denied any wrongdoing but said the company agreed to the settlement to mitigate the "exorbitant cost and endless distraction" of continued litigation.
The settlement with Skechers - which follows a similar settlement with Reebok International Ltd. last year - is part of the of the FTC's crackdown to stop overhyped advertising claims.
One of the Skechers' advertisements challenged by the FTC included Shape-ups ads featuring celebrities Kim Kardashian and Brooke Burke.
Airing during the 2011 Super Bowl, the Kardashian ad showed her dumping her personal trainer for a pair of Shape-ups.
The Burke ad told consumers that the newest way to burn calories and tone and strengthen their muscles was to tie their Shape-ups shoe laces.
Under the FTC settlement, Skechers is barred from making certain claims for its toning shoes unless they are true and backed by scientific evidence.
Consumers can find out more about the settlement and how to file for a refund if they are eligible at www.ftc.gov/skechers.
Contact Michael Hinkelman at email@example.com, or follow on Twitter @MHinkelman.