Former retailer speaks out about LuLaRoe losses, company faces $1 Billion lawsuit

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Gabrielle Aranda is a former LuLaRoe retailer who joined the company in the spring in an effort to spend more time with family.

"I worked day and night, it was definitely not part-time. It was definitely full-time, more than full-time," says Aranda.

Aranda invested and lost more than $9,000 in the company.

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. The lawsuit claims that none of LuLaRoe`s bonus payments to their consultants depended upon an actual sale to a consumer.

Aranda had a hard time selling the inventory she had and was encouraged to buy more. "They're getting more money off of what I'm investing, but I'm not making any money off of it."

LuLaRoe says they have not been served with the complaints, but officials say the allegations are baseless and factually inaccurate.

We spoke with Elizabeth Garcia with the North Alabama Better Business Bureau. She says with multi-level marketing companies there are a few red flags you should be on the lookout for before you buy in.

"If the company requires you to buy a large amount of product to have in your inventory and they do not provide you with training on how to move the product. That says the company is perhaps making more money off of you buy the inventory than from you selling it," says Garcia.

And if the company is more concerned by the number of people you've recruited under you than the actual product, "That's a definite red flag that this could be a pyramid scheme and you should be careful," explained Garcia.

Garcia tells us at this time they've received no complaints at the local BBB office about LuLaRoe.