The federal insurer of bank deposits on Thursday issued a demand that Monetary Gold, a precious metals trader based in Woodland Hills, Calif., cease and correct its misleading advertising that falsely claims consumers’ federally insured bank deposits are at risk of forfeiture, the agency said.
“The FDIC asserts that Monetary Gold of Woodland Hills, California, is engaging in a marketing campaign to sell gold products by falsely indicating that consumer insured bank deposits can be legally seized by banks,” the Federal Deposit Insurance Corp. (FDIC) said in its announcement.
The agency is also calling on Newsmax.com to stop publishing these misleading ads and to issue a correction to its readers following its publication of “Walls Street’s Worst Nightmare.” “In this sponsored ad for Newsmax.com, Monetary Gold falsely asserts that Federal law permits banks to ‘take its depositors’ funds (i.e. your checking, savings, CDs, IRA and 401(k) accounts) and use those funds when necessary to keep itself, the bank, afloat,’” the agency said.
The FDIC called the assertions false: Federal law, it said, “is clear that in the unlikely event of a bank failure, customers’ insured deposits would be fully protected up to the $250,000 limit.”
The demand to cease the false advertising was delivered by letter from FDIC’s legal counsel. That letter gets more specific about the violations in question, noting that the Federal Deposit Insurance Act prohibits anyone from knowingly misrepresenting the federally insured status of funds.
It adds that federal criminal law prohibits “falsely advertis[ing] or otherwise represent[ing] by any device whatsoever the extent to which or the manner in which the deposit liabilities of an insured bank or banks are insured by the Federal Deposit Insurance Corporation.” Additionally, it states that unfair or deceptive advertisements are prohibited by the Federal Trade Commission Act and the California Deceptive Practices statute.