Reebok Australia has been slammed with a $350,000 fine.
Reebok has been ordered to pay a pecuniary penalty of $350,000 for making false and misleading representations about the benefits of EasyTone shoes.
The Federal Court ruling is part of proceedings bought by the Australian Competition and Consumer Commission (ACCC).
Reebok claimed its EasyTone shoes would increase the strength and muscle tone of calves, thighs and buttocks more than traditional walking shoes.
The representations were made on shoe boxes, swing tags, information cards and in-store promotional material.
The Court ruled the claims were false, misleading, and consequently contravened the Australian Consumer Law (ACL).
The Court also held that Reebok had no reasonable grounds for making the representations.
The Federal Court made orders requiring Reebok to provide a refund of $35 per pair to select consumers.
These are buyers who purchased a pair of the EasyTone shoes from September 2011 to February 2013.
Shoppers can seek compensation if they believe they suffered loss or damage as a result of Reebok’s representations.
Reebok must establish a 1800 number for consumers to reach the company, as well as publish corrective notices with details of how consumers can seek redress.
The Court also made orders for implementation of a compliance program and costs.
Reebok has offered EasyTone shoes in Australia since December 2009.
The ACCC’s proceedings related to the representations made by Reebok in connection with the sale and promotion of the EasyTone shoes from September 2011 to February 2013.
Reebok was aware that similar enforcement action had been taken by the US Federal Trade Commission against Reebok International.
ACCC deputy chair Delia Rickard said the company continued to promote the shoes in Australia despite this action.
"The fact that these claims made about the alleged benefits of EasyTone shoes had come to the attention of regulators in other jurisdictions but still continued to be made in Australia by Reebok was of particular concern to the ACCC."