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LuLaRoe hit with $1 billion lawsuit alleging pyramid scheme

SAN DIEGO, Calif. – A popular clothing company is being sued for at least $1 billion after attorneys claimed their clients were left in ‘financial ruin’ because of the company.

The Riverside Press-Enterprise claims that a $1 billion class-action lawsuit was filed Monday against LuLaRoe.

LuLaRoe recruits people to buy inventory upfront and then sell the clothing to other customers.

The lawsuit, which was filed on behalf of three women, claims that they were encouraged to take out loans, run up credit card debt and even sell their breast milk, which left some of them in financial ruin with products they couldn’t sell.

“Consultants are instructed to keep around $20,000 worth of inventory on hand, and are inundated with the phrase ‘buy more, sell more,'” the lawsuit said. “New consultants are aggressively pressured to continue purchasing wholesale inventory even when the inventory they have is not selling, is unlikely to sell, or is piling up in their garage.”

LuLaRoe told NBC San Diego that the lawsuit is baseless and inaccurate.

“We have not been served with the recent complaints, but from what we have seen in media reports, the allegations are baseless, factually inaccurate and misinformed. We will vigorously defend against them and are confident we will prevail,” the company said in a statement.