The U.S. Consumer Financial Protection Bureau (CFPB) said in an order on Tuesday that BloomTech, the for-profit coding bootcamp previously known as the Lambda School, deceived students about the cost of loans, made false claims about graduates’ hiring rates, and engaged in illegal lending masked as “income sharing” agreements with high fees.
The order marks the end of the CFPB’s investigation into BloomTech’s practices and the start of agency’s penalties on the organization.
The CFPB is permanently banning BloomTech from consumer lending activities and its CEO, Austen Allred, from student lending for a period of 10 years. In addition, the agency is ordering BloomTech and Allred to cease collecting payments on loans for graduates who didn’t have a qualifying job and allow students to withdraw their funds without penalty, as well as eliminate finance changes for “certain agreements.”
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