Were you victimized by LuLaRoe? Tell us about your experience.
Are you struggling with LuLaRoe and are starting to think it might be a pyramid scheme? You aren’t alone.
What is LuLaRoe?
Lularoe is a company that sells women’s clothing. Independent Distributors who are called fashion consultants sell their products directly, usually via social media or at home parties. They sell a range of women’s clothing including dresses, skirts, and more under the auspices that you get to select things a fashion consultant can confirm are flattering and viable for your body shape.
LuLaRoe Lawsuits
The state of Washington filed a lawsuit against the company alleging that it was a pyramid scheme.The lawsuit filed on behalf of the state’s consumer protection unit alleged that the company made claims about inventory refunds and profitability that were deceptive. They are seeking a penalty of $2,000 per violation, plus restitution for Washington customers, those who joined the company and were operating under deceptive pretenses. Consultants claim they have not been paid for the merchandise they returned to the company.
One of their suppliers has submitted a writ of attachment, otherwise known as a demand for assets, and filed a lawsuit against the company stating that they failed to pay their bills. they demanded that the court sees the 34 million dollars in assets from the company to resolve the dispute of 63 million dollars. The 9 consultants from Providence Industries, A supplier for LuLaRoe claim that the company owes them $63 in refunds for unsold inventory that was returned once they exited the business.
There is another lawsuit over the quality of the products they sell. The lawsuit was brought by two of the customers accusing the brand of ignoring the thousands of complaints about the defective merchandise and continuing to sell them. The lawsuit accuses the company of eight counts of illegal, fraudulent, and unfair business practices and violating laws that protect vendors and customers from such practices.
The company has refused to deal directly with customers for any defective leggings in spite of the thousands of claims that have been brought to their attention and instead instruct the individuals who have a problem to address it with the seller. The seller has to come to the company for a refund for the defective product where they also faced a roadblock and don’t see that refund in accordance with the company rules.Thousands of customers and sellers are stuck with defective products because the company won’t issue refunds or make exchanges.
Why is LuLaRoe Considered a Pyramid Scheme?
This company is considered a pyramid scheme because it emphasized recruiting rather than actual sales. The company had a focus on bonus checks for the fashion consultant who recruited other people, checks that were between 7 and 12 times higher than the bonuses they would get for merchandise sales. This means that the structure incentivizes people to Simply recruit more people who would have to pay sometimes up to $9,000 to sign up and get started.
The company used several deceptive claims regarding the profitability saying that only active fashion consultants who worked full-time could expect to make between $60,000 and $75,000 per year while those that worked part-time could expect to make between $10,000 and $500,000 a month and yet according to lawsuits, most consultants reported less than $10,000 in total profits with one-third of the people working for the company reporting losses because of the amount of money they had to put in to getting started and buying inventory of front.
What can I do?
If you have dealt with this company as a seller or a consumer and brought your complaint to the attention of the company but, much like in the people in the lawsuits, they’ve done nothing about it, you still have options including consumer arbitration.
The Ultimate Guide to Consumer Complaints
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