LuLaRoe’s Hot Pants Are In Hot Water With Washington State
If you haven't heard by now, the LuLaRoe clothing company is being sued by Washington state Attorney General Bob Ferguson for running an illegal money-making scheme and deceiving consultants residing in the state of Washington.
LuLaRoe is being accused of being a pyramid scheme, running deceptive practices.
The lawsuit, filed Jan. 25, charges LuLaRoe with running a multi-level marketing (MLM) scam. According to the lawsuit, LuLaRoe violated the Anti Pyramid Promotional Scheme Act and the Consumer Protection Act when it offered bonus incentive checks (and failed to pay said bonuses) to its independent consultants. Bonuses were being offered based on how many new recruits franchisee retailers gained.
The privately held company is headquartered in Corona, Calif., under the helm of co-founders Deanne Brady and Mark Stidham. LuLaRoe is popular for their wild-print leggings, which are said by many customers to be very comfortable.
While not legally required to be publicly disclosed, the LuLaRoe company's transparent income disclosure statement returns a blank page on their URL.
New independent LuLaRoe consultants have had to pay average start-up cost fees of $$4,000 to $9,000. The current "Become A Retailer" URL page also does not have any active links to join the company.
This is not the first time LuLaRoe has been sued, according to this 2017 news report from Denver7 News.