Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

CFPB Takes Action Against Coding Boot Camp BloomTech and CEO Austen Allred

consumerfinance.gov

Post reply on HN
Print view View original

31–40 of 384 posts

Re: CFPB Takes Action Against Coding Boot Camp BloomTech and CEO Austen Allred

#31

Post by TheMagicHorsey »

This is great. But I hope they do the same thing to so called "legitimate" universities who have long deceived students as to the value of the degrees they grant.

I recently met a liberal arts student from an Ivy League university who has been under-employed for twenty years. She still has unpaid student loans and she graduated in 2007! She has had to work in retail positions from time to time. And she's considering retraining via a vocational school to be an electrician because that's what her father and brothers do and they make 300K+ a year via the family business.

Re: CFPB Takes Action Against Coding Boot Camp BloomTech and CEO Austen Allred

#33

Post by JumpCrisscross »

dylan604 wrote: post #18
Twirrim wrote: post #5

This is the boot camp school formerly known as Lambda School, that came under a lot of fire in the past for these types of practices, and other issues. Previous trouble they've been in: https://dfpi.ca.gov/2021/04/26/lambda-school-reaches-settlem... https://techcrunch.com/2021/05/13/lambda-school-lawsuits/

This is one of those situations lending support to the corporate death penalty. Allowing name changes like Worldcom, Spectrum, and so on to write off some liabilities while operating as if nothing happened.

> the corporate death penalty

This is a silly idea lobbyists love because it sidesteps the actual corporate-destruction mechanism: liquidation to pay massive fines, license revocation and/or personal liability for senior management.

Consider even the penalties here, which effectively ban Allred and Lambda from doing business. If you corporate death’d them, the contracts and assets would still exist. Allred would be unpunished. Everything would go back to shareholders who were presumably fine with the status quo, and would be fine putting them into a new entity that Allred could manage. Okay, so you cancel the contracts. Now the janitor who hasn’t been paid in two months is screwed. Okay, so you exempt employees. Allred’s an employee! Exempt him? What do you even pay the janitor with? Okay, exempt some assets. How many? How do you choose who must keep paying versus who is let off? Maybe pro rata? Who will administer all this? Et cetera, et cetera.

Contrast that to a massive fine. Company goes Chapter 7 and into a deep body of law that has experience dealing with the above. (Ideally paired with a license revocation from any lending for Allred and the entity, in case they try to Chapter 11.) Shareholders are wiped and free to pursue Allred. Allred and Lambda are neutralised.

Re: CFPB Takes Action Against Coding Boot Camp BloomTech and CEO Austen Allred

#34

Post by threeseed »

g42gregory wrote: post #23
saadatq wrote: post #8

Unreal: > Allred tweeted that the school achieved a 100 percent job-placement rate in one of its cohorts, and later acknowledged in a private message that the sample size was just one student.

Technically, the statement is still valid. It's just that the confidence interval will be wide. :-)

He seems to be the king of technically.

"For a few months in 2013, Allred camped out of his car while in Silicon Valley, and frequently describes this period as having been homeless. However, a deleted post on his blog titled 'Voluntarily Homeless in Silicon Valley' explains that he lived out of a car by choice."

Re: CFPB Takes Action Against Coding Boot Camp BloomTech and CEO Austen Allred

#35

Post by adrr »

dylan604 wrote: post #18
Twirrim wrote: post #5

This is the boot camp school formerly known as Lambda School, that came under a lot of fire in the past for these types of practices, and other issues. Previous trouble they've been in: https://dfpi.ca.gov/2021/04/26/lambda-school-reaches-settlem... https://techcrunch.com/2021/05/13/lambda-school-lawsuits/

This is one of those situations lending support to the corporate death penalty. Allowing name changes like Worldcom, Spectrum, and so on to write off some liabilities while operating as if nothing happened.

Or you could just toss people in jail. This case is clearly wire fraud if the company knowing provided fraudulent hiring rates to get people to pay money for a service.

Re: CFPB Takes Action Against Coding Boot Camp BloomTech and CEO Austen Allred

#37

Post by nickff »

ceejayoz wrote: post #12
willcipriano wrote: post #7

[flagged]

Any you’d like to highlight that come anywhere close to “we picked a sample size of one student” or “no finance charge means $4k finance charge”?

Colleges do tend to be a bit more careful, but they often publish hiring numbers based on graduates rather than students, when advertising. This is deceptive, because they never mention their completion rates (which are often around 50%), and significantly impacts the calculus.

Re: CFPB Takes Action Against Coding Boot Camp BloomTech and CEO Austen Allred

#38

Post by JumpCrisscross »

sandofsky wrote: post #29
petsormeat wrote: post #17

It's disappointing that California's Bureau for Private and Post-Secondary Education (BPPE) continued to approve this boot camp. I thought the rationale for creating the bureau was to discourage scams in job training.

At first I found it weird that the BPPE can't discipline a company until it's registered and operating legally. So for the first few years, it couldn't do anything. The twist is that until the BPPE approves a school to operate, any student debt obligations up to that point are not valid. In theory, anyone in California who enrolled before August 2020 owes them nothing. The problem is that Lambda School still tries to…

> If they do lawyer up, they end up being forced into arbitration due to an arbitration clause in their student agreements

You’re literally describing why arbitration works. Someone low income can just file for arbitration with minimal work by a lawyer. Contrast that with the tens of thousands they’d need to pay a litigator.

Re: CFPB Takes Action Against Coding Boot Camp BloomTech and CEO Austen Allred

#39

Post by sandofsky »

JumpCrisscross wrote: post #38
sandofsky wrote: post #29

Earlier quoted context omitted.

At first I found it weird that the BPPE can't discipline a company until it's registered and operating legally. So for the first few years, it couldn't do anything. The twist is that until the BPPE approves a school to operate, any student debt obligations up to that point are not valid. In theory, anyone in California who enrolled before August 2020 owes them nothing. The problem is that Lambda School still tries to…

> If they do lawyer up, they end up being forced into arbitration due to an arbitration clause in their student agreements You’re literally describing why arbitration works. Someone low income can just file for arbitration with minimal work by a lawyer. Contrast that with the tens of thousands they’d need to pay a litigator.

That true, but this ends up being a game of whack-a-mole, and even a few thousand dollars is too much for a lot of victims. Recently there was an attempt to mount a class action lawsuit, which would have settled things for everyone in one fell swoop, and it was rejected due to the arbitration clause.

Re: CFPB Takes Action Against Coding Boot Camp BloomTech and CEO Austen Allred

#40

Post by afavour »

Honestly this ought to be an indictment against the Silicon Valley set as a whole but oh well:

> The investment is largely coming from Gigafund, the VC started by ex-Founders Fund partners in 2017 originally to put more money into SpaceX, with Tandem Fund and Y Combinator (where Lambda School was incubated) also participating. Its list of other backers include GV, GGV, and Stripe. (Tommy Collison, the head of business development at Lambda, is the younger brother of the two Collison brothers who co-founded Stripe.)

https://techcrunch.com/2020/08/21/lambda-school-raises-74m-f...

Post reply on HN