The Washington State Attorney General’s Office appears to be investigating the multilevel marketing company LuLaRoe, sources with knowledge of the investigation told Business Insider.
The agency has helped secure refunds over several months — some worth thousands of dollars — for former sellers of the company’s clothing who reside in Washington, according to five former consultants who said they were recently contacted and interviewed by an investigator with the agency.
Topics covered during these interviews were wide-ranging and included LuLaRoe’s business practices, ordering processes, and quality issues with the company’s clothing, sources said. Two people said investigators have obtained data, including consultants’ sales numbers, from LuLaRoe.
The Washington State Attorney General’s Office said it doesn’t comment on the status or existence of investigations, but Washington Attorney General Bob Ferguson provided the following statement in regard to LuLaRoe.
“I’m aware my office has received complaints about LuLaRoe,” Ferguson said. “If Washington consumers are having problems getting refunds, they should contact my office.”
LuLaRoe did not respond to a request for comment.
One woman told Business Insider that Ferguson’s office is helping her get a refund worth nearly $7,000, which she has been trying to secure from LuLaRoe for seven months.
LuLaRoe stated in an April 2018 email — which was reviewed by Business Insider — that it would pay her that amount for inventory that she had returned to its warehouse after she exited the business.
Hundreds of former LuLaRoe sellers have also said they have been waiting for months for refunds from LuLaRoe, as Business Insider has previously reported. These refunds are for unsold inventory, which LuLaRoe said it would buy back from retailers who exited the business.
Amid all this, LuLaRoe is also facing a $49 million lawsuit from its chief supplier, Providence Industries, which alleges the clothing company has failed to pay its bills for seven months. LuLaRoe has denied the claims in the lawsuit.