HARRISBURG — Attorney General Josh Shapiro today announced a settlement imposing injunctive relief and a monetary payment of $110,000.00 against California-based clothing company, LuLaRoe, LLC and LulaRoe, Inc. This legal action is the result of numerous complaints from Pennsylvanians owed overdue refunds for returned merchandise.
“LuLaRoe misled and let down working people who were trying to start a business, or earn a little extra money, and we’re holding them accountable,” said Attorney General Josh Shapiro. ”LuLaRoe’s practices helped them make money, while forcing everyday people to risk savings and livelihoods. By withholding refunds, sometimes for more than a year, LuLaRoe broke the promise they made to Pennsylvanians and we’re stepping in to put an end to it.”
LuLaRoe sold clothing to consumers nationwide through independent sales consultants, including more than 6,700 Pennsylvanians, who were lured into starting a business supplied by LuLaRoe with the promise of a no-risk opportunity. These Pennsylvanians spent thousands of dollars to buy the clothing that LulaRoe required so these consultants could start their business.
“I invested a lot of money in this business and didn’t get back what I put in,” said Lesley Black, a former LulaRoe consultant. “Because they were so backlogged with consultants leaving, my paperwork to receive my refund wasn’t reviewed for several weeks, if not months, after I left the business. LulaRoe didn’t keep their promise to consultants, and didn’t care if we left, stayed, or even threatened to sue.”
Instead, the company lacked the operational capacity or otherwise failed to process refund claims. Consultants spoke of unreasonable delays, at times more than a year, for LulaRoe to process their requests even when a refund was admittedly owed. Such a delay was not disclosed prior to entering into their consultant contract and was not expected with LulaRoe’s marketing their services as starting a risk-free business.
This settlement protects Pennsylvanians by imposing a substantial civil penalty, prohibiting such further deceptive acts and practices and by requiring LuLaRoe to process all written refund claims within 90 days from receipt. LuLaRoe’s settlement is in the form of an Assurance of Voluntary Compliance (AVC). While LuLaRoe has represented that they have processed all pending refund claims from Pennsylvanians, consumers who believe they continue to be victimized by LuLaRoe should file a complaint at www.attorneygeneral.gov or email scams@attorneygeneral.gov.
This settlement was filed in Dauphin County Court of Common Pleas by Senior Deputy Attorney General Juan (J.P.) Sánchez.
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