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BloomTech Inc., d/b/a Bloom Institute of Technology or BloomTech, f/k/a Lambda, Inc.; and Austen Allred

On April 17, 2024, the Bureau issued an order against BloomTech, Inc., a for-profit vocational school that is also known as the Bloom Institute of Technology and was formerly known as the Lambda School, and Austen Allred, the company’s founder and CEO. BloomTech provides short-term, six- to nine-month training programs in areas such as web development, data science, and backend engineering. To finance its substantial $20,000 tuition, until 2024, BloomTech offered students income share agreements. Under the agreements, students could attend BloomTech if they agreed to pay the school a percentage of their monthly income from a qualifying job with an income of at least $50,000 after they graduate. Nearly all BloomTech’s students funded their enrollment in its programs with such agreements. The Bureau found that BloomTech and Allred made false representations about the income share agreements and the benefits students would receive if they entered them, including that the agreements were not loans and carried no finance charge, that the school’s interests were aligned with its students’ interests because the school got paid only when students got a high-enough paying job, and that the school had high job-placement rates and a top-notch curriculum and instructors. The Bureau found that BloomTech and Allred violated the Consumer Financial Protection Act of 2010’s prohibition of deceptive and abusive acts or practices with its deceptive statements and by taking unreasonable advantage of consumers’ reasonable reliance on BloomTech to act in their interests. The Bureau also found that BloomTech violated the Truth in Lending Act and its implementing regulation, Regulation Z, by failing to disclose key facts about its financing agreements, such as the amount financed, finance charge, and annual percentage rate; and that BloomTech violated the Holder Rule by failing to include a provision in its financing agreements making any holder of the agreement subject to the legal claims that students could assert against BloomTech. The Bureau’s order permanently bans BloomTech from all consumer-lending activities and bans Allred from any student-lending activities for ten years. It also rescinds income share agreements for graduates who have not had a qualifying job in the past year; reforms income share agreements to eliminate the finance charge for consumers who graduated the program more than 18 months ago and obtained a qualifying job making $70,000 or less; and gives current students the option to withdraw from the program and cancel their income share agreement or continue in the program with a third-party loan or lawful income share agreement. The order also requires that BloomTech and Allred pay civil money penalties of $64,235 and $100,000, respectively.

Consent Order


Press release

CFPB Takes Action Against Coding Boot Camp BloomTech and CEO Austen Allred for Deceiving Students and Hiding Loan Costs

Case Docket

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