Inducing students to take out loans by allegedly misrepresenting the quality of the training programs at partner schools and making false claims about hiring rates and salaries is the basis of a lawsuit against a Las Vegas, Nev.-based student lender announced Thursday by the federal consumer financial protection agency.
The Consumer Financial Protection Bureau (CFPB) said it sued student lender Climb Credit and investment firm 1/0 (“one-zero”) for allegedly deceiving student borrowers about coding bootcamps and vocational programs. The bureau said Climb Credit and, what it termed as “its investor,” 1/0 “lured customers with false promises they had vetted partner schools, shared false data on salaries and hiring.”
The agency said it is asking the court to order Climb Credit and 1/0 to “stop their illegal practices, compensate the borrowers they harmed, and pay a civil penalty to the CFPB’s victim relief fund.” The agency did not state the total penalty or borrower compensation it seeks.
According to the bureau, Climb Credit, Inc. is a Delaware corporation headquartered in Las Vegas, Nev., that markets private student loans. Climb Credit was headquartered in New York until 2022, the CFPB said, and “maintains significant operations there.”
The CFPB’s lawsuit also names wholly owned subsidiaries Climb Investco and Climb GS Loan Fund, the agency said. “The investigation also uncovered facts to charge the company’s controlling investor 1/0 Holdco LLC, and 1/0 Capital,” according to the CFPB.