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LuLaRoe is currently being sued by a handful of the brand’s consultants for being a pyramid scheme. The class-action lawsuit’s plaintiffs are alleging that LuLaRoe has encouraged sellers to max out credit cards and to do other crazy irresponsible financial decisions like sell their own breast milk.
According to Teen Vogue, “Consultants are instructed to keep around $20,000 worth of inventory on hand, and are inundated with the phrase ‘buy more, sell more,'” the lawsuit states. Because of the incentive to “buy more, sell more” consultants are pressured to overbuy products causing some consultants to go in debt and hoard products in the garage.
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The plaintiffs are arguing that the company preys on mother’s and makes promises that the women can stay home and make money. According to BuzzFeed News, the plaintiffs said that when their LuLaRoe business endeavors fail the company refuses to reimburse them the thousands of dollars.
The lawsuit also states, “The vast majority of consultants sitting at the bottom of defendants’ pyramid were and remain destined for failure and unable to turn any profit.” Women say that they were encouraged to max out credit cards, take out loans and sell their own breast milk.
A LuLaRoe mentor Kim Roylance shared a story about how a waitress noticed her LuLaRoe jacket and told her how she sold her breast milk so she could start her LuLaRoe business without going into debt.
https://www.youtube.com/watch?v=dCjmhIqj_SI
Other plaintiffs are claiming that they returned their extra inventory for a partial refund and never received any payment. They are also claiming that LuLaRoe changed their return and refund policy without warning sellers. They switched their 100% refund policy to 90% with no warning.
LuLaRoe is an emerging clothing brand, but since it’s formation stories about a woman faking her death for a dress and poor quality clothes have emerged. The company has yet to speak out about their current legal woes.
