CALIFORNIA (WQOW) - You've seen the leggings on Facebook – now the company is facing a $1 billion lawsuit.
A federal class-action lawsuit claims retailers for LuLaRoe were scammed by an illegal pyramid scheme that left them in financial ruin.
LuLaRoe is known for selling clothes, most notably leggings, through pop-up parties on Facebook and in-person. The plaintiffs claim the company encouraged them to take out loans, rack up credit card debt, and even sell their breastmilk to buy thousands of dollars worth of inventory upfront that later couldn't be returned. The lawsuit says consultants are promised part-time work for full-time pay, which “isn't the case”. The plaintiffs detail aggressive pushes to keep buying inventory, when what they had wasn't selling.
Cheryl and her daughter Tiffany say they were manipulated and lied to when they signed up. “I invested close to... between $15,000 and $20,000 in inventory,” Tiffany told ABC News. Many more women have reported unfair and illegal business practices to CBS, BuzzFeed News, Racked, and other outlets.
As many as 80,000 people have become LuLaRoe consultants. The company currently has an F from the Better Business Bureau.
The federal lawsuit seeks at least $1 billion in damages. The company had $2 billion in sales in 2017.
LuLaRoe calls the claims baseless and inaccurate.