It was always false and deliberately deceptive to claim that Lambda’s California Retail Installment Contracts were qualified education loans under federal law, and therefore subject to discharge only on cases of undue hardship.
Lying about that in commerce in CA was not previously something for which there was previously a clear cause of action, especially one which would allow the State to take action. It’s not, at least in purpose, classic fraud: it is designed not to induce purchases but to dissuade past purchasers from seeking bankruptcy relief.
