The Federal Deposit Insurance Corporation (FDIC) is cracking down on three companies for making false or misleading statements about deposit insurance. PrizePool, Inc., AmeriStar, LLC, and HighLine Gold, LLC have been ordered to cease and desist from making these claims, which the FDIC says are causing harm to consumers.
The FDIC has reason to believe that AmeriStar and HighLine Gold are related entities, sharing the same principals and physical address. This has led the FDIC to issue a joint letter to the companies, demanding that they take immediate corrective action.
According to evidence collected by the FDIC, these companies and certain associated parties have made false representations by stating or suggesting they are FDIC-insured or that certain uninsured financial products are insured by the FDIC. They have also misused the FDIC name or logo, misrepresented the nature or extent of deposit insurance, and failed to clearly identify the insured depository institutions with which they have a relationship.
“The Federal Deposit Insurance Act prohibits any person from engaging in false advertising by misusing the name or logo of the FDIC or from making knowing misrepresentations about the existence of or the extent or manner of deposit insurance,” said FDIC Chairman Martin J. Gruenberg. “Combatting misrepresentations about deposit insurance coverage goes to the heart of the FDIC’s mission of maintaining stability and public confidence in the nation’s banking system”.
The FDIC has been authorized by the Federal Deposit Insurance Act to enforce this prohibition against any person. On December 20, 2023, the FDIC Board of Directors adopted a final rule to amend part 328 of its regulations, which updates the FDIC’s regulations regarding false advertising, misrepresentations of deposit insurance coverage, and misuse of the FDIC’s name and logo.
FDIC deposit insurance protects customers in the unlikely event of the failure of an insured depository institution. To determine if an institution is FDIC-insured, consumers can ask a representative of the institution, look for the FDIC sign at the institution, or use the FDIC’s BankFind tool. For general information about FDIC deposit insurance, consumers can read the FDIC’s frequently asked questions and fact sheet on digital asset companies.
The FDIC is urging consumers to be aware of these false claims and to take steps to protect themselves. Consumers can report any suspicious activity to the FDIC’s Consumer Protection Division.
The FDIC’s letter to PrizePool, Inc. and the joint letter to AmeriStar, LLC and HighLine Gold, LLC are available on the FDIC’s website.
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Key Facts
- Agency: FDIC
- Category: Fraud & Financial Crimes
- Source: Official Source â†â€â€ÂÂ
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