LuLaRoe, the multi-level clothing marketer, has come under fire for its business practices.
The company recruits people to pay several thousand dollars up front to buy clothing, then sell it out of their homes.
A $1 billion class action lawsuit now alleges the company has been carrying out an illegal pyramid scheme -- by pressuring consultants to purchase more products than they can afford, then making it difficult to get a refund on the product they can’t sell.
Michigan-based LuLaRoe consultant Jamie Craig is not yet part of the class action lawsuit, but she says she's compelled to get involved.
Craig tells 7 Action News that she's frustrated by the fact that the company makes you purchase a certain amount of clothing to get involved, but then makes it difficult for you to return what you don't want or can't sell.
Craig is one of 80,000 consultants working across the country with the company.
She started with the company in March 2017— investing $15,000 of her own money, but she hasn’t turned a profit — saying she gets stuff with a backlog of stuff that doesn't’ sell.
"They say if you don’t like it, then you can return back to us...and then they don’t. It’s been three months and I haven’t heard a word from them," said Craig, who lives in Walled Lake.
Craig says she was supposed to get a 100 percent refund back in August, but by the time the company replied to her request, she was told a new policy had gone into effect.
"You have to pay for your own shipping— they take 10 out of what they’re supposed to give you back," said Craig of what the company told her about the new policy.
Craig says she has $7,000 worth of clothing here that she’ll be forced to -- at least in part -- take a loss on.
The new class action lawsuit is seeking to get all money lost for consultants returned.
LuLaRoe says they have yet to receive the complaint, but they’ve seen the media reports.
In a statement to Channel 7, the company said "...the allegations are baseless, factually inaccurate and misinformed. We will vigorously defend against them and are confident we will prevail."
