LuLaRoe, a direct sales clothing brand, is once again facing controversy. Four plaintiffs have filed two class-action lawsuits against the company, accusing them of six counts of misconduct, including unfair business practices, misleading advertising and breach of contract, according to Business Insider. The law suits were filed on October 13 and 23 of this year, and both were filed in the U.S. District Court for the Central District of California. The plaintiffs claim the reason for the law suits were due to the changing of the company's buyback policy in September of this year.

LuLaRoe scams its consultants

LuLaRoe is a direct sales clothing brand, meaning the company does not sell its merchandise in Retail stores or on a website. Instead the company hires consultants to sell their products. The consultants must be referred by another consultant and must also purchase $5,000 worth of inventory in order to get started selling and making money.

The lawsuits are derived from the company's buyback policy which changed multiple times in the last year alone. Originally consultants were hired under the return policy which stated, if consultants wished to return any merchandise they did not sell, they could do so for a 100% refund. However, the problem for most consultants came in September when, after not selling enough merchandise, they tried to return the inventory only to discover that there was a 90% refund not the full 100% as promised.

Furthermore, some consultants have yet to see any refund at all. Resulting in many consultants losing out on thousands of dollars with no way of earning it back.

LuLaRoe business practices

Many consultants have brought LuLaRoe's business practices into question with claims they were encouraged to incur massive amounts of debt in order to purchase more inventory.

The company encouraged this through their slogan, "Buy more, sell more."

In March of this year, Business Insider conducted an investigation and discovered that 80% of LuLaRoe's consultants could not clear $5,000, with the average monthly sales being $3,389 in the previous month.

Business Insider, also, reported a controversial webinar by CEO Mark Stidham who made statements like "No, you're stale.

Your customers are stale," concerning complaints about consultant's inability to sell.

There were even reports in Scary Mommy and other media outlets of a certain LuLaRoe training video that encouraged mothers to sell their breast milk in order to be able to purchase new inventory.

Many consultants, who were drawn to the company because of their women-friendly vibe, believed this would be the solution to their money problems, reported Scary Mommy. However, most have found their dealings with LuLaRoe to have only made them worse, and at least one consultant claims to have been placed on anti-anxiety medication due to the stress caused by the company's business practices.
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