Agency demands that three companies drop alleged ‘false, misleading’ statements about deposit insurance coverage

Alleged false and misleading statements about federal bank deposit insurance coverage have earned three companies and others cease-and-desist demands from the insurance agency, it said Tuesday.

PrizePool, Inc. (PrizePool), AmeriStar, LLC (AmeriStar), and HighLine Gold, LLC (HighLine Gold) were all told by the Federal Deposit Insurance Corp. (FDIC) to  take immediate corrective action to address the alleged false or misleading statements.

The FDIC said that in the case of AmeriStar and HighLine Gold, the agency has reason to believe those companies are related entities sharing several of the same principals and the same physical address, and therefore, it issued a joint letter to them.

“Based upon evidence collected by the FDIC, these companies and certain associated parties made false representations by: (1) stating or suggesting they are FDIC-insured or that certain uninsured financial products are insured by the FDIC; (2) misusing the FDIC name or logo; (3) misrepresenting the nature or extent of deposit insurance; and/or (4) failing to clearly identify the insured depository institutions with which they have a relationship for the placement of customer deposits and into which funds may be deposited.

“The evidence suggests these misrepresentations are causing harm, or have the potential to cause harm, to consumers,” the agency said.

In a release, the agency reminded that its board late last year (Dec. 20) adopted a final rule updating its regulations regarding false advertising, misrepresentations of deposit insurance coverage, and misuse of the FDIC’s name and logo.

“For example, the final rule clarifies that FDIC-associated terms or images may not be used in marketing and advertising materials to inaccurately imply or represent that any uninsured financial product or non-bank entity is insured or guaranteed by the FDIC,” the agency said.

FDIC Demands Three Companies Cease Making False or Misleading Representations about Deposit Insurance