Friday, September 22, 2017

Commentary: Is LuLaRoe eating its own tail?

Recently, multiple news outlets reported several disturbing reports that LuLaRoe is not only rescinding money back policies, but also threatening to sue a blogger critical of its operations to obtain information that it claimed were "proprietary".  This has raised questions about why would a company with claimed 80000 reps would turn on its reps like this.

First, multiple TV stations reported that local reps are worried when LuLaRoe rescinded its no-fee 100% money back and free return shipping policy, which has only been in effect for a month. Instead, reps are to use the regular return channel, which only return 90% of price, but also have to pay shipping.

According to reps, the inventory you get from LuLaRoe is like hitting a lottery, as you cannot specify designs, merely quantity and size. Similar to collectible card games. Certain rare patterns sell quickly at inflated prices on eBay or such, while the rest languish in rep's stock, until the rep either liquidate them on eBay and give up, or try to go through the buyback process. There are rumors that up to 4000 cases of refunds are pending, and people have been waiting for months

And unlike other MLMs, LuLaRoe's startup costs are extremely high, as much as 5500 dollars to start, and if rep can't sell them, often the advice one gets from rep's upline is "order more!"  Some reps claimed you need about 15000 in inventory and markup of over 40% to earn a profit. And if you get a bunch of duds from the factory order (remember, it's random), you will have to arrange a trade with a different rep... if you can find someone who wanted your duds and trade you something they considered duds.

One blog that exposed such practices, and other complaints about LuLaRoe from disgruntled customers and reps was Christina Hinks, better known as MommyGyver online. And after publishing many such complaints, including documents shared online by such, Hinks has been served with a "discovery petition" from LuLaRoe demanding that she...

...disclose the identity and contact information of potential defendants who have damaged LLR and its goodwill by providing Respondent with LLR's confidential and proprietary business information, information about LLR and its merchandise, and false, derogatory information regarding LLR, much of which respondent has posted on her blog,
The interesting thing is much of the information had already been shared online via various social media platforms.

LuLaRoe so far has yet to comment about this potential SLAPP suit, though they did respond to the change in return policy (which is technically against their own company policy that changes in return policy must be announced for 30 days before it can go into effect). LuLaRoe's statement claimed the policy was always 90% buyback. The "improved" 100% buyback and free shipping was merely a temporary "waiver".

Tuesday, September 19, 2017

Scam Tactic: Moving the Goalpost (aka Special Pleading)

Moving the goalpost is very simple to explain with a single image:

Moving the goalpost, courtesy of zapiro @
If someone moves the goal post, you'll never to be able to score a goal.

So what does that have to do with scams? Two ways:

1) when scammers promised one thing, then moved the goalpost with some excuses, or

2) when scam deniers tried to deny the evidence of the scam by moving the goalpost.

Scammer Moving the Goalpost

Scam companies that promise an IPO (initial public offering) while offering stocks or options to affiliates are known to move the goalpost because the IPO either will never take place, or takes place but were completely useless.  One such example was Wantong Miracle 萬通奇跡 scam in China, where a known scammer who launched multiple scams in China AND in the US seem to have finally been arrested by Chinese authorities.

Some suspect that recent attempts by Visalus to roll back the promised "founders equity incentive plan" may also be "moving the goalpost" after one side had already satisfied the requirements, only to be met with even MORE requirements from the other side or lose the supposed equity incentive they have gained, that a judge had to issue a restraining order.

OneCoin, which has been accused by multiple regulatory bodies on multiple continents of being a scam or a suspect scam, has repeated changed or delayed its IPO or ICO (depending on when you asked).  In January and February 2017, OneCoin announced they will go IPO in "early 2018", then the date was moved to July 2018 according to a Chinese website on OneCoin. However, in September 2017, the news completely changed. Instead of IPO, affiliates of OneCoin claimed that OneCoin will conduct an ICO (initial coin offering) instead, and it will not be until October 2018. That's at least THREE delays in less than a year, and it's ALWAYS a year away.

"Always delay the day of reckoning" is a standard bull****er tactic.

Let's go onto our next topic, scam denier moving the goalpost