Attorney General sues multi-level marketing business LuLaRoe as a pyramid scheme

LuLaRoe leggings

OLYMPIA — Attorney General Bob Ferguson announced a lawsuit against multi-level marketing business LuLaRoe and several of its “home office” executives, alleging that the company’s former bonus structure constituted a pyramid scheme.

The lawsuit also asserts that LuLaRoe’s claims regarding sustainability, profitability and inventory refunds are unfair and deceptive.

Ferguson asks the court to require LuLaRoe and its executives to stop its unlawful actions.

If the court rules that LuLaRoe violated the law, the Attorney General’s Office will seek the maximum penalties of $2,000 per violation, as well as costs, fees and other relief.

Ferguson also will seek restitution for affected Washington consumers, but the total amount of restitution the office will seek is still undetermined.

“LuLaRoe tricked consumers into buying into its pyramid scheme with deceptive claims of high profits and refunds for unsold merchandise,” said Ferguson. “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.”

LuLaRoe is a California-based multi-level marketing business that sells leggings and other apparel. The company is made up of individual retailers who sell the company’s clothing, referred to as “Independent Fashion Consultants.” New consultants must be recruited and sponsored by existing LuLaRoe retailers.

File a complaint

Consumers who have had a difficult time returning unsold inventory to LuLaRoe for a refund or have had other issues with the company can contact the Attorney General’s Office Consumer Resource Center at 1-800-551-4636 or file a complaint online.