You've probably seen them around, brightly colored and pattered leggings and tops that are the LuLaRoe trademark. Maybe you've been invited to a party where a consultant tries to convince you to get a few pairs of your own. You might not know that a new lawsuit alleges that those colorful leggings have a dark side.

A new $1 billion class-action lawsuit alleges that LuLaRoe is actually an "unlawful pyramid scheme," according to DontWasteYourMoney.com.

At issue is whether LuLaRoe consultants can actually make money selling the comfy leggings and tops, or whether they rely on recruiting other sellers in order to profit.

It's not just that. According to Quartz, LuLaRoe consultants need to invest around $5,000 just to get started, and then are constantly encouraged to add more and more inventory. But once the consultant has purchased their inventory, the corporation has already made its money. With so many selling the leggings, LuLaRoe sellers - most often women - find themselves stuck with thousands of dollars in unsold merchandise - but are still encouraged to buy more.

Within CNY, many consultants are leaving the LuLaRoe fold. In fact, one Mohawk Valley seller has her entire inventory listed on Facebook for sale. A quick search of LuLaRoe GOOB (going out of business) on CraigsList or eBay yields plenty of results.

These aren't the only concerns to plague the company. A recent change to their policy regarding consultant's returns of excess inventory has left many stuck with merchandise they can't sell (consultants don't get to select the patterns and prints they receive), according to Inc.

There have also been concerns about the quality of the clothing, the leggings in particular. The national coverage that resulted forced the company to respond with a new "Happiness Policy" that allowed shoppers to return defective merchandise. Even the Today show had the story.

There are moms out there really hoping to make some extra money for their families with LuLaRoe. It would be a shame if it turned out that the company was really a wolf dressed in comfy leggings.


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