LuLaRoe to Pay $4.75 Million to Settle Pyramid Scheme Lawsuit

LuLaRoe to Pay $4.75 Million to Settle Pyramid Scheme Lawsuit

LuLaRoe. Facebook

The mid-level marketing company was able to deny any wrongdoing but will need to disclose more financial information to its “retailers” in the future and is prohibited from operating a pyramid scheme, which refers to a company that offers compensation from recruitment, not sales.

Washington State’s attorney general said LuLaRoe, which is known for its affordable leggings, made “unfair and deceptive misrepresentations” about how much money its individual retailers could earn working for the company. As a result, the attorney said, LuLaRoe’s owners made millions and the retailers lost thousands of dollars.

LuLaRoe has faced legal trouble in other states, including a class action in California and a lawsuit from one of its clothing suppliers.

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