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CFPB Takes Action Against Coding Boot Camp BloomTech and CEO Austen Allred for Deceiving Students and Hiding Loan Costs | Consumer Financial Protection Bureau

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WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) issued an order against BloomTech and its CEO, Austen Allred, for deceiving students about the cost of loans and making false claims about graduates’ hiring rates. The CFPB found that BloomTech and Allred falsely told students the school’s “income share” agreement contracts were not loans, when in fact the agreements were loans carrying an average finance charge of around $4,000. BloomTech and Allred lured prospective enrollees with inflated promises of job-placement rates as high as 86 percent, when the company’s internal metrics showed placement rates closer to 50 percent and in some cases as low as 30 percent. The order permanently bans BloomTech from all consumer-lending activities and bans Allred from any student-lending activities for ten years. The CFPB is also ordering BloomTech and Allred to cease collecting payments on income share loans for graduates who did not have a qualifying job, eliminate finance changes for certain agreements, and allow students the option to withdraw without penalty. BloomTech and Allred must also pay over $164,000 in civil penalties, which will be deposited in the CFPB’s victims relief fund.

“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 CFPB Director Rohit Chopra. “Today’s action underscores our increased focus on investigating individual executives and, when appropriate, charging them with breaking the law.”

BloomTech is a for-profit vocational school that is headquartered in San Francisco and owned primarily by Allred and various Silicon Valley venture-capital funds. Allred founded the company as the Lambda School in 2017, and rebranded it as BloomTech or the Bloom Institute of Technology in 2022.

BloomTech operates short-term, typically six-to-nine-month training programs in areas such as web development, data science, and backend engineering. Since 2017, BloomTech originated at least 11,000 income share loans, with most of BloomTech students funding their tuition with these loans. Under almost all these loans, students who earn more than $50,000 in a related field are required to pay BloomTech 17 percent of their pre-tax income each month until they make 24 payments or hit a “cap” of $30,000 in total payments.

The CFPB found that BloomTech students were lured with false promises and deceptive marketing. BloomTech and Allred:

  • Hid the cost and true nature of students’ debt: BloomTech falsely claimed its “income share” agreements were not loans, did not create debt, did not carry a finance charge, and were “risk free.” In fact, the agreements are loans with an average finance charge of $4,000. The loans carry substantial risk, as a single missed payment triggers a default and the remainder of the $30,000 “cap” becomes due immediately. BloomTech further hid the cost and nature of the “income share” loans by not disclosing key terms like the finance charge and annual percentage rate, as required by law.
  • Tricked prospective students with inflated job-placement rates: BloomTech advertised on its website that 71 to 86 percent of students were placed in jobs within six months of graduation, when its non-public reporting to investors consistently showed placement rates closer to 50 percent. 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.
  • Misrepresented their financial interests by selling loans to investors: BloomTech’s marketing represented that its own interests were aligned with students, through claims such as “We don’t get paid until you do,” and “Because we invest in you, instead of the other way around, we only make money when you do.” In fact, the company was selling many “income share” loans to investors and thus often got paid long before a student finished the program and started earning a salary.
  • Engaged in illegal contract practices: BloomTech violated a federal consumer protection known as the Holder Rule, by failing to include a required provision making any owner of the loan subject to the legal claims and defenses that students could assert against BloomTech. Students were therefore deprived of rights they should have had when their “income share” loan was sold to an investor.

Enforcement Action

Under the Consumer Financial Protection Act (CFPA), the CFPB has the authority to take action against institutions violating consumer financial laws, including engaging in unfair, deceptive, or abusive acts or practices. The CFPB found that BloomTech and Allred used deceptive statements and took unreasonable advantage of consumers’ reasonable reliance on BloomTech to act in their interests.

Under the CFPB’s order, BloomTech and Allred must:

  • Cease collecting payments on certain graduates: BloomTech must not collect any additional payments on “income share” loans for graduates who did not have a qualifying job in the past year.
  • Amends “income share” loan contracts: The order reforms “income share” loan terms 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.
  • Allow students to withdraw without penalty: Current students will have the option to withdraw from the program and cancel their “income share” loans or continue in the program with a third-party loan.
  • Pay over $164,000 in penalties: BloomTech will pay over $64,000 and Allred will pay $100,000 in penalties to the CFPB’s victims relief fund.

Read today’s order.

Consumers can also submit complaints about financial products or services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).

Employees of companies who they believe their company has violated federal consumer financial laws are encouraged to send information about what they know to whistleblower@cfpb.gov.

The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit www.consumerfinance.gov.

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fxer
10 hours ago
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Bend, Oregon
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jepler
19 hours ago
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> 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.
Earth, Sol system, Western spiral arm

Tesla Cybertruck No Match For Car Wash

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After just a couple of months and a few thousand miles of ownership, Tik Tok user @captian.ad’s Tesla Cybertruck was effectively a several-thousand-pound paperweight for several hours. After taking his truck to the beach and stopping off at a car wash to clean it up, he parked the truck in his garage, where it decided to just stop working for a while. The screen, which runs all functions of the truck, went black, and wouldn’t respond at all, even after performing the factory prescribed reboot procedure. Not great.

After filing a ticket with Tesla to get the truck rebooted, the Cybertrucker went to bed and woke up the next morning to a mostly functional truck. A call with Tesla confirmed that the truck had needed a complete reboot which took over five hours of sitting to complete. From the moment he’d initiated the reboot method of holding down two steering wheel buttons, the truck was apparently working on a reboot until some time in the middle of the night.

Interestingly the user doesn’t mention whether Tesla was able to offer any insight as to why the truck decided to stop working, if it was caused by the car wash or something else entirely. The Cybertruck’s owners manual does caution against ever washing the truck in direct sunlight, and there is a section expressly mentioning that the truck has to be switched into “Car Wash Mode” before washing to avoid damage to parts of the vehicle.

If you’re out there driving a Tesla Cybertruck, maybe don’t wash it for a while. You never know when you’ll be left stranded waiting for the truck to sort itself out in five hours or so. 

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fxer
10 hours ago
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A five-hour reboot, does it have onboard gcc and build from source?
Bend, Oregon
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acdha
16 hours ago
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“The Cybertruck’s owners manual does caution against ever washing the truck in direct sunlight, and there is a section expressly mentioning that the truck has to be switched into “Car Wash Mode” before washing to avoid damage to parts of the vehicle.”
Washington, DC
freeAgent
15 hours ago
But it's bulletproof*! *some bullets

winamp-tribute_by_rick-gude.jpg

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An old, worn and rough box with mechanical buttons and sliders that resembles what the Winamp music-player software looked like.  An earphone jack and a rocker power switch can be seen on the side.

by Rick Gude
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fxer
1 day ago
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How many llamas asses were whipped to bring us this
Bend, Oregon
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jhamill
2 days ago
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I'd buy that mp3 player
California

Right-Wing Media Are in Trouble - The Atlantic

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fxer
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Study: Silver from early medieval coins came from Byzantine, Francia sources | Ars Technica

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Sometime around 660 CE, silver coinage replaced gold as the dominant form of currency in northwest Europe. But what was the source of all that silver? According to a recent paper published in the journal Antiquity, silver for the earlier post-Roman coins during this period came from Byzantine silver plate, while silver for the later coins most likely came from mines located in Melle, Aquitaine.

“This was such an exciting discovery," said co-author Rory Naismith, a medieval historian at the University of Cambridge. "I proposed Byzantine origins a decade ago but couldn’t prove it. Now we have the first archaeometric confirmation that Byzantine silver was the dominant source behind the great seventh-century surge in minting and trade around the North Sea.”

There are a number of high-tech tools that can be used to learn more about historic currencies. For instance, Michael Wiescher, a nuclear physicist at the University of Notre Dame, has combined XRF scaling with PIXE mapping of Roman denarii to test the currency's quality and learn more about the production techniques. Working with his undergraduate students, he has also used electron spectroscopy to measure the silver content of each coin and learn about how the impurities were distributed.

The Roman silver denarius was the backbone currency of the Roman Empire between 200 BCE and 300 CE. During Nero's reign, the coins were required to be 92.5 percent silver to protect the currency against inflation and devaluation. But the analysis of coins from 250 to 350 CE showed declining percentages of silver because the Roman mints gradually debased the denarius to increase their profits. By 295 CE, the silver content was just about 5 percent. Wiescher's analysis revealed that most of the coins are composed of silver and copper and that sulfur and iron impurities led to corrosion in some of them.

The same trick of replacing some of the silver in coins with copper showed up again thousands of years later in Spain's Latin American colonies. Wiescher analyzed 91 silver rials dated between the 16th and 18th centuries, from Mexico and Potosi, Bolivia.

Between 1645 and 1648, the silver content dropped from 92.5 percent sterling to just 70–80 percent; the rest was a copper admixture. When this was discovered in the 17th century, the silver market in Spain crashed and the coins were devalued, with devastating effects on the colonial Spanish economy. Some of that silver from Spain and Mexico eventually made its way to the early American colonies. The Boston Mint used Spanish silver between 1653 and 1686 for minting coins, once again adding a little copper or iron to increase their profits.

In 2022, scientists used a variety of physics-based methods—classic light microscopy, ultraviolet imaging, scanning electron microscopy, and reflection mode Fourier-transform infrared spectroscopy—to analyze a cache of Roman coins that was discovered in Transylvania in 1713. Several bore the portrait of a Roman emperor named Sponsian and hence were thought to be forgeries, since there are no historical records of a Roman emperor with that name.

The 2022 analysis suggested the coins were probably genuine, speculating that Sponsian may have been an obscure Roman military commander in the Roman province of Dacia, an isolated gold mining outpost that overlaps with modern-day Romania. Given their mining resources, Dacia could have minted their own coins with Sponsian's image, which would have helped cement his authority and maintain economic stability and social order until the area was finally evacuated between 271 and 275 CE.


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For this latest study, the coinage in question is the silver currency that came on the scene around 660 CE, which marked "a major transformation in the early medieval economy," according to the authors. Historians have long debated where the silver for that coinage came from. Did people melt down Roman plate and/or recycle Roman scrap metal? Was it imported from the Byzantine, as Naismith argued in 2012? Or was there a revival in silver mining around this time in medieval Europe, particularly in Melle in western France?

“There has been speculation that the silver came from Melle in France, or from an unknown mine, or that it could have been melted down church silver," said Naismith. "But there wasn't any hard evidence to tell us one way or the other, so we set out to find it.”

Prior work had tested coins and artifacts from Melle silver mines, but less attention had been paid to coins minted in England, the Netherlands, Belgium, and northern France. Naismith et al. used a combination of lead isotope and trace element analysis to study 49 medieval silver pennies and denarii from the Fitzwilliam Museum in Cambridge. For the lead isotope analysis, they relied on a new technique called "portable laser ablation" to collect microscopic samples onto Teflon filters—a less invasive approach than traditional methods while maintaining high precision.

As one might expect, most of the coins contained silver. It was the respective amounts of gold, bismuth, and other elements that provided clues to the origin of the silver used in the coins. Per Naismith et al., 29 of the earlier coins (dated between 660 and 750 CE) showed chemical and isotopic signatures consistent with Byzantine silver from the third and early seventh centuries, including between 0.6 and 2 percent gold. There is no known European ore source matching those signatures, which are also not consistent with late Western Roman silver coins. This provides evidence of international trade relations between modern-day France, the Netherlands, and England.

Naismith points out that high-ranking people in England and Francia at this time possessed a great deal of silver artifacts, as evidenced by the significant cache of Byzantine discovered at Sutton Hoo. He estimates that this cache alone, had it been melted down, would have produced some 10,000 early pennies.

“These beautiful prestige objects would only have been melted down when a king or lord urgently needed lots of cash," said co-author Jane Kershaw of the University of Oxford. "Something big would have been happening, a big social change. This was quantitative easing, elites were liquidating resources and pouring more and more money into circulation. It would have had a big impact on people’s lives. There would have been more thinking about money and more activity with money involving a far larger portion of society than before.”

The remaining 20 coins analyzed for the study dated to a later period between 750 and 820 CE. This silver had substantially lower amounts of gold (in some cases, less than 0.01 percent), consistent with silver mined at Melle. The older, now debased silver was likely captured and refined for re-minting, combined with newer silver from Melle.

Naismith et al. suggest that Charlemagne was behind the shift to silver from Melle, citing records from the 860s in which King Charles the Bald (grandson of Charlemagne) decided to reform his kingdom's coinage and provided the mints with some silver to get the process going. Charlemagne may have done something similar, providing silver sourced from Melle to his mints. "It was only following the major reform of coinage by Charlemagne in 792–793 that coins from all surveyed mints showed a strong shift toward Melle-like silver," the authors concluded.

Antiquity, 2024. DOI: 10.15184/aqy.2024.33  (About DOIs).

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fxer
5 days ago
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Bend, Oregon
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They don't come much more eviscerating than that

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If you're a Christian and you're big mad about the possibility of student load debt being cancelled, let me remind you that the entirety of your faith is built upon a debt you couldn't pay that someone stepped in a paid for you.

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fxer
10 days ago
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…but not like that!
Bend, Oregon
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