Women’s clothing firm LuLaRoe and the state attorney general’s office have struck a $110,000 deal to end a dispute over refunds to the company’s sales consultants.
At issue were claims that the California-based company was taking an unacceptably long time to give its consultants promised refunds for unsold goods.
LuLaRoe denies any trade law violations, according to the assurance of voluntary compliance petition the firm and the AG’s office jointly filed in Dauphin County Court.
In that petition, investigators claim they received complaints of overdue refunds from 52 LuLaRoe consultants in Pennsylvania. The firm has more than 6,700 consultants in the state.
The petition states that new consultants must buy at least $5,590 worth of clothing to begin selling for LuLaRoe and are required to sell at least 33 items a month to remain on the active consulting roster.
The AG’s office claims LuLaRoe pledged to give consultants full or partial refunds for unsold clothing although that pledge did not come with a time frame. It says the more than 1,700 consultant complaints involved about $9 million worth of what investigators claim were unnecessarily delayed refunds that didn’t arrive for up to a year from the date of request.
They insist the supposed failure to provide timely refunds constitutes an “unfair and deceptive business practice” under Pennsylvania’s Consumer Protection Law.
The 52 consultants have now been paid, the petition states.
It cites LuLaRoe’s contention that it was addressing the supposed refund delays even before learning of the AG’s investigation. The firm says it is committed to handling refund requests within 90 days of the receipt of returned clothing.
The compliance agreement calls for the company to pay a $95,950 civil penalty to the state, plus $14,050 to reimburse the AG’s office for the cost of its investigation.