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FDIC Demands Three Companies Stop False Insurance Claims
The Federal Deposit Insurance Corporation (FDIC) has issued letters to three companies demanding they cease making false and misleading statements about FDIC deposit insurance.
The companies in question are PrizePool, Inc., AmeriStar, LLC, and HighLine Gold, LLC. The FDIC has reason to believe that AmeriStar and HighLine Gold are related entities sharing the same principals and physical address, and therefore, issued a joint letter to them.
According to the FDIC, these companies and their associated parties made false representations by stating or suggesting they are FDIC-insured, misusing the FDIC name or logo, misrepresenting the nature or extent of deposit insurance, and failing to clearly identify the insured depository institutions with which they have a relationship.
The FDIC has evidence that these misrepresentations are causing harm or have the potential to cause harm to consumers.
“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 is authorized by the Federal Deposit Insurance Act to enforce this prohibition against any person.
In December 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.
The FDIC is urging consumers to be cautious of companies making false or misleading statements about deposit insurance and to take the necessary steps to verify the insurance status of their financial institutions.
For more information about FDIC deposit insurance, consumers can visit the FDIC’s website or contact the FDIC directly.
FDIC Chairman Martin J. Gruenberg emphasized the importance of maintaining stability and public confidence in the nation’s banking system.
Key Facts
- Agency: FDIC
- Category: Fraud & Financial Crimes
- Source: Official Source â†â€â€ÂÂÂ
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