NEWSLuLaRoe in $1B lawsuit for shady business model
LuLaRoe in $1B lawsuit for shady business model
Multi-level marketing brands may be a quick way to make a buck for some people, but for others it may spell financial ruin.
On Monday, October 23rd, former distributors for multi-level marketing legging and athleisure brand LuLaRoe are filing suit against the company. These distributors, called “Retailers” by LuLaRoe, accuse the company of being a pyramid scheme, as defined by California law.
The 1 billion dollar suit federal class action suit, filed by three plaintiffs, seeks damages for incurring at least $20,000 dollars of debt upon its sales consultants. 80,000 of those consultants paid up front for their inventory. LuLaRoe denies all charges.
In the brief attached to the filing, former retailers claimed that they were strongly encouraged to keep up to “$20,000 worth of inventory on hand” including “10 items in every size and style.”
According to the suit against LuLaRoe, the suit stated that one someone decided to become a consultant, “they were pressured to invest and reinvest by purchasing the Defendants’’ clothing products — regardless of whether they were able to sell the inventory.”
Read full article and learn more about Deceptive Advertising here.
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