LuLaRoe faces lawsuit, clients claim it acts like a pyramid scheme

The California clothing company faces a billion-dollar lawsuit from clients who claim it is acting like a pyramid scheme.

LuLaRoe sells clothing, like leggings and dresses, to independent fashion retailers. They resell the items to customers through online and in-home sales.

LuLaRoe says it has more than 80,000 independent fashion retailers who have sold more than $2 billion of LuLaRoe apparel so far this year.

Some of the retailers allege they were misled into investing thousands of dollars in merchandise with the hopes of making huge profits.

LuLaRoe retailer Gabrielle Aranda told CBS News that she joined the company this past spring to spend more time with her family, but ended up investing — and losing — more than $9,000 in just a few months.

The lawsuit seeks a billion dollars for a proposed class of plaintiffs who it says “were unknowingly recruited into [LuLaRoe’s] pyramid scheme through manipulation and misinformation.

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