Former BloomTech Students File Class-Action Lawsuit Over Fraudulent Advertising, Illegal Lending Practices
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March 16, 2023
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Former BloomTech Students File Class-Action Lawsuit Over Fraudulent Advertising, Illegal Lending Practices
The coding bootcamp, formerly known as Lamba School, promoted inflated job placement rates and engaged in illegal lending under California law
Student Defense, along with co-counsel Miner, Barnhill, & Galland and Cotchett, Pitre & McCarthy, today filed a class-action lawsuit against Bloom Institute of Technology, formerly the Lambda School, and its CEO, Austen Allred, on behalf of students who enrolled at the school from March 2020 to the present.
The students allege that Lambda misrepresented post-graduation job placement rates and engaged in illegal lending practices under California law. The lawsuit asks for students’ income sharing agreements (ISAs) to be canceled and all payments made under these agreements refunded as restitution.
“For years, Lambda knowingly seduced the public with inflated job placement rates even though internal records made clear the actual rates were substantially lower,” said Student Defense Vice President Alex Elson. “The time has come to hold the school and its executives accountable, so that the thousands of students they deceived can receive full restitution and move on with their lives.”
This lawsuit is the latest in a string of legal filings that Student Defense has brought against Lambda and Mr. Allred.
Lambda has long been under scrutiny for its marketing tactics, including advertising inflated job placement rates. In 2019, Lambda touted an 86% job placement rate, but an internal report from the same year obtained by Student Defense revealed the actual rate was “50% placement for cohorts that are 6 months graduated.” Additional internal documents later revealed that the rate had plummeted to just 30% in the first six months of 2020.
The complaint also alleges that Lambda operated illegally until it received state approval on August 17, 2020, and that the school continues to engage in the unlawful business practice of unlicensed lending.
A full copy of the complaint can be found here.