$1 billion lawsuit filed against LuLaRoe by Sacramento area women

A class action lawsuit has been filed in California against the LuLaRoe clothing company, sought by former consultants alleging they were coaxed into a pyramid scheme.
2:24 | 10/29/17

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Transcript for $1 billion lawsuit filed against LuLaRoe by Sacramento area women
Now, a billion-dollar class action lawsuit claims the people never saw the money they were promised. Reporter: More than 80,000 people have signed up as independent retailers for lularoe. The lawsuit claims many of them fork out thousands of dollars up front for the inventory. The plaintiffs say the business plan is illegal. Lularoe, known for it's colorful clothing and pop-up party sales approach this morning is facing a $1 billion class action lawsuit claiming the california-based company is an alleged pyramid scheme. Lefing many women in financial ruin. I invest T, close to -- between $15,000 and $20,000 in inventory. Reporter: Tiffany and her mother, Cheryl, claimed they were recruited through manipulation and misinformation. Told the opportunity entailed part-time work for full-time pay. Saying this was not the case. The lawsuit alleges new consultants are aggressively pressured to continue purchasing inventory even when the inventory they have was not selling. When they couldn't afford, to they were encouraged to take loans, take out credit cards. Some were encouraged to sell prayer breast milk. The lawsuit says it's more about recruiting women in your quote unquote downline. Reporter: The company says the allegations are baseless, factless, and misinformed. Some independent retailers say they are thriving. I have been successful because I never, ever stop setting goals for myself the. You can make money selling these clothes because you are a business owner. Reporter: But these women say they never saw a profit. My goal is that the company be held accountable. . Reporter: A separate lawsuit has to do with a refund situation. The company says it's success is making it a target. The company saying it plans to defend itself and win. Cecilia an Dan? Marci, thank you.

This transcript has been automatically generated and may not be 100% accurate.

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