Feds hit coding boot camp with big fine for allegedly conning students
The US Consumer Financial Protection Bureau (CFPB) has slapped coding boot camp BloomTech with several punishments for alleged deceptive business practices.
The business, which claims on its site it will help students land their "dream job" in tech at companies like Amazon, Cisco, and Google, accepted the consent order without admitting or denying any wrongdoing.
In an announcement yesterday, the CFPB said it had taken action against BloomTech and its CEO Austen Allred for allegedly not disclosing the true cost of its loans to students and allegedly claiming overoptimistic hiring rates for BloomTech graduates. BloomTech, formerly Lambda School, has operated since 2017 and offers six- to nine-month vocational programs in science and engineering, with a focus on computer technology.
"BloomTech and its CEO sought to drive students toward income share loans that were marketed as risk-free, but in fact carried significant finance charges and many of the same risks as other credit products," said Rohit Chopra, director of the CFPB. With income share loans or income share agreements, BloomTech allowed students to pay tuition later but in exchange had to pay a percentage of their future income, CFPB claimed.
