Since we talked about leggings last week, let’s revisit an older story about LuLaRoe. If you will remember, LuLaRoe has been part of a number of lawsuits, regarding everything from not paying their suppliers to being an illegal pyramid scheme. Let’s take a look at the current LuLaRoe lawsuit status.
Washington State Lawsuit
In early 2019, the Washington state Attorney General filed a lawsuit against LuLaRoe alleging that the company is an illegal pyramid scheme and has defrauded thousands of Washington residents.
“LuLaRoe tricked consumers into buying into its pyramid scheme with deceptive claims of high profits and refunds for unsold merchandise,” said Ferguson in a prepared statement. “Instead, many Washingtonians lost money and were left with piles of unsold merchandise and broken promises from LuLaRoe. It’s time to hold LuLaRoe accountable for its deception.” Source
The allegations were that LuLaRoe violated both the Washington AntiPyramid Promotional Scheme Act and the Consumer Protection Act, misrepresented the potential profitability and used an unlawful bonus structure and refund policy.
As of this February, the case has been settled out of court. LuLaRoe has to pay a whopping $4.75 million dollars as well as change their business structure and be more transparent about actual profitability of joining the company. Thankfully, $4 million of that will go to help Washington LuLaRoe sellers partially recoup some of their losses.
Of course, that doesn’t help all of the people in states other than Washington who also had major losses thanks to LuLaRoe.
MyDyer LuLaRoe Lawsuit Status
Another LuLaRoe lawsuit comes courtesy of MyDyer, a major supplier for the company. To quickly summarize the lawsuit, MyDyer sued LuLaRoe for not paying their bills (over 7 months of invoices allegedly did not get paid), and accused the owners of hiding assets to avoid having to pay. In response, LuLaRoe countersued, saying that the allegations, as well as cutting off their supply chain, hurt their business. It’s been a fascinating back and forth, partially because owners of both companies were once very friendly, so now there are a lot of personal attacks being made atop the financial claims. (Perhaps this is yet another indication that you shouldn’t go into business with friends – such as joining their MLM.)
This case is still wending its way through the courts.
Is LuLaRoe Still Around?
I know that I don’t see as much about LuLaRoe as I used to – the people I know who were part of the MLM have gotten out, and I do hope that none of them lost too much money. But LuLaRoe is still alive and kicking – and continuing to produce new styles as well. LuLaRoe held their annual convention last year, as it was before March, but they haven’t announced dates for 2021, though that is likely as related to the pandemic as it is to their lawsuits. I still wouldn’t recommend purchasing from them, as they are a very harmful company with low quality products. I fully expect them to be out of business soon.
Megan is a 40-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:
In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance. It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information. It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck. While that was working for me, clearly I needed a better plan.
While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.
Except that’s not what an emergency fund is for.
So I did a lot of research, read a lot of blogs, and decided that I needed a plan. I needed to budget. I needed to know what I was spending my money on. I needed to prepare for the future.
I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way. I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.