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

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

#331

Earlier quoted context omitted.

Yes. Most states have a system where students attend school, receive an education, and pay the school back using a portion of their income after graduation. They're often referred to as "public schools", and ISAs are often called "taxes".

Those schools still charge you $50k and take 4 years of your time, so I'm not sure how that comparison makes sense, particularly for working folks looking to uplevel their skills.

Those schools have not always charged $50k - that's a recent political choice. I'd point to student loan policy as the main driver [0].

Many bootcamps require full-time attendance, and many universities have part-time options. Further, community colleges are an option if the only goal is skill acquisition. Those programs take less time and are cheaper.

0 - John Oliver is not the primary driver of my thinking, but he did an interesting and engaging segment if you're interested: https://www.youtube.com/watch?v=zN2_0WC7UfU

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

#332
post #216

Earlier quoted context omitted.

I'm not sure all the ISA issues are clearly stated in the contract, or whether they were clearly stated in all the contacts, before they started to get into trouble. But they clearly lied about much of this stuff in the headline publicity. Lying prominently and 'clarifying' the lies in the small print is obviously still fraud. Doing fraud and saying 'but the majority of the people we defrauded still had an overall po…

Can you point out the lies? I'm genuinely trying to find them, and the CFPB article does not provide any evidence other than a few marketing quotes. I'm very sure all the ISA issues are clearly stated in the contract. Everything is very clear about the fact that you will pay a minimum of $17-18k, and a max of $30k as a percentage of your monthly income. It was very clear that missing a payment would incur the entire…

It seems like you are implying that lies in "marketing quotes" are not real lies? I don't think that this is the case.

In the rest of your comment you repeat the claim that I was responding to, that all the correct information was in the contract. You seem to have ignored the two key caveats I made: that their contracts might be compliant now, but they probably weren't before they were first investigated. And secondly that they have demonstrably lied extensively outside of the contracts themselves. Lying to convince someone to sign a contract which of itself is truthful, is definitely fraud.

Perhaps you don't understand "the hidden finance charge" because you don't understand regulation of consumer credit. When you buy a car, the dealer has to show you numbers breaking down what the cash price of the car is, and how much you will pay in interest. This stops them tricking people by eg raising the sticker price and telling you that the credit is cheaper than it is. This isn't a guideline, it's a law. And the numbers have to be presented in a way which is not obscure or misleading. Scott Tucker got 16 years for this.

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

#333
post #153

Earlier quoted context omitted.

In January 2020, as news broke about Lambda School's scummy behavior, Graham gave Austen a pep talk which he later expanded into the essay, "Haters." It has aged like a fine milk. https://paulgraham.com/fh.html

From the footnotes: > There are of course some people who are genuine frauds. How can you distinguish between x calling y a fraud because x is a hater, and because y is a fraud? Look at neutral opinion. Actual frauds are usually pretty conspicuous. Thoughtful people are rarely taken in by them. So if there are some thoughtful people who like y, you can usually assume y is not a fraud. I guess all those folks calling…

(Edit: I've been informed on a side channel that non-disparagement clauses can no longer be enforced. IANAL--can someone elaborate?)

As someone who was a low-ranking insider at Lambda some years back, it was my perception that the people calling Lambda out presented a mixed bag in terms of veracity.

Someone here commenting on this story said that Lambda counted their student TAs in their employment stats, for example, but to the best of my knowledge this never happened. There were a handful (like three or four that I know of) that we did hire as full-time staff doing real jobs, and I'm pretty sure we counted them as employed, but not the student TAs.

With respect to this ruling, it says that students were subjected to up to $4,000 finance charges. I hadn't heard of that at all. Reading the details, it turns out that's the difference between the published upfront cost of paying Lambda versus using an ISA. The upfront cost wasn't hidden; it was published right next to the ISA cost. But because they weren't the same value, and it was probably more expensive to use the ISA, they called the difference a finance charge. Which is fine, but if Lambda had simply not allowed people to pay upfront, there wouldn't have been a "finance charge" to complain about. In other words the finance charge was already published in the rules for how the ISA would be repaid. So, factually accurate, but a strange thing to complain about, like complaining that the upfront cost of a house is lower than the mortgage cost.

Still others complain about the selling of the ISAs to investors, and say that that means that Lambda would still make money no matter how well their students performed. However, this would be a very short-sighted strategy as no investors would buy the ISAs if the students weren't performing. So selling them didn't really remove any of Lambda's impetus to place students in jobs. (It did improve the cash flow situation, however, which is why it happened.) From what I saw, the goal of placing students was ever-present regardless of whether or not Lambda was currently selling ISAs.

My point is, there's a lot of information out there by a lot of people who aren't sure about what they're talking about. And it can be tough to know what's real and what's not.

One thing I can say with certainty is that all the instructors who worked there back in the day were absolutely fucking passionate about getting students into jobs and changing the world, in that naive startup way. Some of the success stories from those early cohorts are the things I'm most proud of in my entire tech and teaching career.

As part of my layoff agreement, I had to sign a non-disparagement clause to get my severance.

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

#334

Earlier quoted context omitted.

> You can't expect 100% of students to have a good time, No one in this thread has suggested this.

The guy I responded to said 10% having a bad time was an ethical disaster, so what's the bar? 1%? 9%?

Nope, that's not what they said.

If 90% of students aren't _scammed_, but 10% are _scammed_, there is an ethical disaster. But at this point it's clear you either have some actual financial incentive/relationship with Lambda School, or you just don't want to be wrong. Either way, I don't think engaging any further will be fruitful.

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

#335

Earlier quoted context omitted.

"Have a bright future as a (job)" "(job) can earn (x) dollars a year!" When in reality that career is losing jobs and less than 10% of graduates get one. Anything what would have you work in a museum would probably meet this criteria. Alternative is they told the truth, everyone went in with eyes wide open and everyone is responsible for their own student loans.

Those claims come nowhere close to the outright fraud laid out in the CFPB complaint.

[deleted]

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

#336
CFPB needs to be burned to the ground. How tf is this even constitutionally legal?

It doesn't matter what your political leanings are or what you think about the matter at hand. No agency should have the much power to be the judge jury and executioner. Oh and also to just write laws at a whim.

This is really not cool. I have no idea how anybody who calls them selves an American can be cool with this.

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

#337
YEARS ago (2002? 2003?) I'd done some tech training courses in my town. "Learn web dev" kinda stuff. Was very much a part time thing, but I'd looked in to "hrm... could I make this a business?". And learned about the numbers... and learned about ISAs. If I could get accredited(?) as a certain type of school, I could deal with ISAs with students.

I kept looking at the numbers, and couldn't find a way to make this be ... profitable. The time it would take for competent professionals to spend adequate time with folks wasn't something most people could really afford. So... either get them to take out loans, or do an ISA. Neither of those seemed to make sense for the types of students who might most need this, and... it just left a bad taste in my mouth. I enjoyed the teaching part, but couldn't find a way to make it a good business.

Then years later I started seeing all these bootcamps charging thousands and thousands for what seemed to be garbage (mostly). Left another bad taste in my mouth.

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

#338
post #66

I attended Lambda when it was first starting out. I think I was in the third or fourth cohort. At the time, the sell was that you didn't have to pay anything unless you got a job using the skills you learned from them. I was pretty naïve, I guess. Things seemed fine in the beginning. The instructors were good, and I liked that there were actual live classes. Things degraded very quickly. They kept changing the format…

> They then started billing me for it because I was working in tech, in the job I had for 6 years before I ever even started their program. That's damning. While I get that ISAs are controversial, I didn't expect this kind of nonsense - I wonder how common it was that enrollees were charged for "landing" their old job? In any case, sorry this happened to you, hopefully this recent ruling will give you some recourse.

>I didn't expect this kind of nonsense

Serious question: why not? What out of SV and VC in the past 20 years has shown they have any intention of doing anything the expensive but "good/right" way rather than cut any corner, oversell, overpromise, underdeliver, and literally commit crime to get their paycheck?

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

#339
post #333
post #153

Earlier quoted context omitted.

From the footnotes: > There are of course some people who are genuine frauds. How can you distinguish between x calling y a fraud because x is a hater, and because y is a fraud? Look at neutral opinion. Actual frauds are usually pretty conspicuous. Thoughtful people are rarely taken in by them. So if there are some thoughtful people who like y, you can usually assume y is not a fraud. I guess all those folks calling…

(Edit: I've been informed on a side channel that non-disparagement clauses can no longer be enforced. IANAL--can someone elaborate?) As someone who was a low-ranking insider at Lambda some years back, it was my perception that the people calling Lambda out presented a mixed bag in terms of veracity. Someone here commenting on this story said that Lambda counted their student TAs in their employment stats, for example…

> Someone here commenting on this story said that Lambda counted their student TAs in their employment stats, for example, but to the best of my knowledge this never happened. There were a handful (like three or four that I know of) that we did hire as full-time staff doing real jobs, and I'm pretty sure we counted them as employed, but not the student TAs.

That's true. A source of confusion is that the school did hire at least one bootcamp graduate as an instructor, though he graduated from a different bootcamp. And it's worth pointing out that the marketing material promised world class instruction, and a fresh bootcamp grad with zero industry experience is the very opposite of that. For that matter, the head of the data science program was the CEO's brother, whose only industry experience was from a no-name company in Utah.

> With respect to this ruling...

It's a waste of time to argue the semantics of income share agreements at this point. They always operated in a gray area, which is why Lambda School hired lobbiests to try to make them officially legal. That effort failed, and the law has decided they're just another form of loans with convoluted hoops to jump through.

I imagine that they got that $4,000 number from all the people who attended the program, received zero practical skills to get jobs, went on to further training (another bootcamp or even an associates degree) and still had to pay back the company because the terms of the ISAs lasted anywhere from five to eight years.

> Still others complain about the selling of the ISAs to investors, and say that that means that Lambda would still make money no matter how well their students performed. However, this would be a very short-sighted strategy as no investors would buy the ISAs if the students weren't performing.

Given the ISAs disappeared from the marketplaces that resold them to hedge funds, that sounds like exactly what happened. The issue is that it fooled prospective students into thinking, "Hey, if this company is able to run off ISAs, the program must work!" In fact the company made money by leaving hedge funds as bag holders.

> My point is, there's a lot of information out there by a lot of people who aren't sure about what they're talking about. And it can be tough to know what's real and what's not.

The same is probably true of Bernie Madoff, Charles Ponzi, and Sam Bankman-Fried. When someone acts like a sociopath for long enough, people start to assume that everything they do is unethical. There is a long list of crimes that the company committed which have been verified from multiple sources. A few people on the internet getting the details wrong doesn't invalidate that.

> As part of my layoff agreement, I had to sign a non-disparagement clause to get my severance.

They did the same thing to students who scrounge together the money to hire a lawyer to get out of their ISAs. These students had to any reference to Lambda School from their LinkedIn profile and tell nobody about what happened. While you did it to make money, imagine how it would feel sign away your right to free speech for fear of a $30,000 debt.

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

#340

Earlier quoted context omitted.

Yeah the Mighty situation is when I started to question PG's decision making. Obviously he's super successful and has helped companies worth hundreds of billions of dollars succeed and grow. But even Steph Curry has off nights. Mighty always sounded like a bad idea. But when I saw PG really making a big deal about it I followed Suhail on twitter because I just had to see what PG was going on about. From what was post…

Suhail was lying to himself constantly on his Twitter. He believed reality different. PG talked with Suhail and thought, well Suhail is posting publicly and telling those he knows and I know things are going well, so things are likely going well. Because who would lie that hard? But that was Suhail, totally sure in his lie, smart enough to change the future, but dumb enough to not see his business sucked. I don’t thi…

We should be extremely hard on these people. They have accumulated staggering amounts of money and power and use it to exercise influence over many aspects of our daily life.

As a society we should work tirelessly to hold them accountable and break up their concentrated power when it develops.

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