LuLaRoe, known as much for its super soft leggings as its disgruntled sales consultants, is trending again — this time because of newly filed class-action lawsuits.
Both suits allege the company misled salespeople with a pyramid scheme.
In the first, filed on Oct. 23, three California women allege the company encouraged its consultants to take out credit cards, get loans, borrow money and even sell breast milk to purchase inventory that wouldn’t sell.
The plaintiffs — Aki Berry, Tiffany Scheffer, and Cheryl Hayton — who filed suit in the U.S. District Court for the Central District of California, claim that the women were not allowed to choose the patterns on the leggings they sold, which created a backlog of inventory, but were encouraged to keep buying because “the more you buy, the more you sell.”
The suit further alleges the company engaged in unfair and deceptive business practices, false advertising and an endless chain scheme.
Another lawsuit was filed by four plaintiffs on Oct. 13, also in the U.S. District Court for the Central District of California.
That lawsuit also alleges unfair business practices, misleading advertising and breach of contract.
Representatives for LuLaRoe sent a statement to All the Moms, saying that its exponential growth in the last four years has made the company a target for “orchestrated competitive attacks and predatory litigation.”
“We have not been served with the recent complaints, but from what we have seen in media reports, the allegations are baseless, factually inaccurate and misinformed. We will vigorously defend against them and are confident we will prevail.”
AlltheMoms.com was the first to report in September that the company had suddenly eliminated its popular 100 percent buy-back guarantee policy.
The company abruptly reverted to its original buy-back program, placing strict stipulations on returning merchandise.
In the September story, women reported they were poised to incur thousands in debt by losing the 100 percent buy-back guarantee.