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Consumer Financial Protection Bureau fines BloomTech for false claims
The Consumer Financial Protection Bureau has found that BloomTech, the vocational school startup, misrepresented its practices and business.
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. “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,” CFPB director Rohit Chopra said in a statement. Prior to the CFPB order, BloomTech, which briefly landed in hot water with California’s oversight board several years ago for operating without approval, had faced other lawsuits claiming the school misrepresented how likely graduates were to get a job and how much they were likely to earn.
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