LuLaRoe controversies
Controversies tied to this brand in public sources. A listing is not a finding of fault.
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2021
LuLaRoe agrees to settle Washington lawsuit
Settlement
LuLaRoe agreed to pay $4.75 million to settle a lawsuit filed by Washington state, which accused the company of operating a pyramid scheme and making deceptive claims. The settlement includes restitution for Washington residents and requirements concerning retailer income disclosures, bonuses and refunds. The company denied wrongdoing and said the agreement did not admit liability or violation of law.
Company response
Denial — LuLaRoe
The company also stated that although they were settling, the agreement "specifically states that none of the defendants has admitted liability or violation of any laws" and the "defendants denied, and continue to deny, any wrongdoing."
Source excerpt
The embattled multilevel marketing company LuLaRoe has agreed to pay $4.75 million to settle a lawsuit filed by the state of Washington, which accused the company of engaging in a pyramid scheme.
Ferguson filed the lawsuit against LuLaRoe in 2019, charging that the defendants "made unfair and deceptive misrepresentations" about how much money a person could make selling the company's clothes.
Under the terms of the deal, LuLaRoe will also be required to adhere to certain guidelines while operating in the state in the future.
2019
Washington pyramid-scheme enforcement action
The Washington attorney general alleged that LuLaRoe's compensation structure and income representations violated state law by emphasizing recruitment and misleading prospective consultants.
2018
Livestream insult controversy
A prominent distributor mocked people with mental disabilities during a livestream. The National Down Syndrome Society ended its relationship with LuLaRoe after the company declined to terminate the distributor's relationship following an apology.
2017
Product-quality and refund controversy
Customers reported that leggings tore or developed holes soon after purchase. Complaints were followed by litigation, an F rating from the Better Business Bureau, changes to refund procedures, and continued disputes over delayed or reduced refunds.
2017
California pyramid-scheme class action
A California class action alleged that LuLaRoe engaged in misleading advertising, unfair business practices, breach of contract, and pyramid-scheme conduct. The company characterized the claims as baseless and inaccurate.