An investigation by the Pennsylvania Attorney General has found LuLaRoe’s Buy Back Policy to be “unfair and deceptive”.

The AG alleges LuLaRoe’s business practices are in violation of Pennsylvania Consumer Protection Law.

After receiving nineteen consumer complaints, seventeen of which pertained to refund complaints, the Pennsylvania AG initiated an investigation into LuLaRoe’s business practices.

The investigation found that LuLaRoe “lured” consumers into its
MLM opportunity
, with assurances made through its Buy Back Policy.

LuLaRoe lures Consultants into agreeing to front the required $5,590 to purchase the requisite amount of LuLaRoe clothing to become a Consultant.

To remain “active” … Consultants … are continually encouraged to buy more LuLaRoe goods.

In at least some instances, Consultants brought into LuLaRoe’s business premised upon LuLaRoe’s misrepresentation that they would (be) able to get a full and/or partial refund on all products not sold.

As per figures obtained through the AG’s investigation, since initiating its Buy Back Policy LuLaRoe has received

at least 1725 refund requests … which generally ranged from $3000 to $5000, and in total exceeded $9,000,000.

The investigation found that LuLaRoe had

engaged in … unfair and deceptive business practices pertaining to the refund claim process.

In many instances there has been a significant and unreasonable delay of time from the date the Consultants requested a refund and the time their refund check was sent.

The AG claims that pertaining specifically to Pennsylvania, LuLaRoe owed fifty-two Consultants overdue refunds.

In light of LuLaRoe’s representation through the Buy Back Policy and “no risk” opportunity, it is unfair and deceptive for LuLaRoe … to timely process Consultant refund claims.

It is unfair and deceptive for a business to represent a refund policy to induce Consultants to extend significant capital and then have a slow pace buy-back process resulting in many Consultants being harmed by not having significant capital returned … within a reasonable amount of time.

In a filed Assurance of Voluntary Compliance, the Pennsylvania AG notes LuLaRoe “fully cooperated” with his investigation.

In response to the investigation, LuLaRoe has represented to the AG’s Office that

it has already extended considerable resources to make sure that claims made under the Buy Back Policy were timely processed; and

legitimate refund claims will continue to be fully processed within 90 days of the receipt of clothing returned by the Consultant, including the payment fo any money owed for the requested refund.

LuLaRoe disputes alleged violations of Pennsylvania Consumer Protection Law, going so far as to dispute the evidence put forth by the AG.

Nonetheless LuLaRoe has agreed to desist from violating Pennsylvania Consumer Law.

The agreement form part of a settlement reached between LuLaRoe and the AG’s Office.

In addition to the refund issue, there’s also this interesting

🤖 Quick Answer

What did the Pennsylvania Attorney General find regarding LuLaRoe's Buy Back Policy?
The Pennsylvania Attorney General determined that LuLaRoe's Buy Back Policy constitutes "unfair and deceptive" business practices in violation of Pennsylvania Consumer Protection Law. The investigation, triggered by nineteen consumer complaints primarily concerning refunds, revealed that LuLaRoe used misleading assurances to recruit consultants into its multilevel marketing scheme.

How does LuLaRoe recruit new consultants into its business model?
LuLaRoe recruits consultants by requiring an initial investment of $5,590 to purchase inventory of LuLaRoe clothing products. The company presents its Buy Back Policy as a protective measure, assuring recruits they can resell unsold inventory. Once enrolled, consultants face continuous encouragement to purchase additional merchandise to maintain "active" status within the organization.

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