AmeriLife First Financial Seeks Correction of Inaccurate and Misleading
Statements by the FDIC
CLEARWATER, Fla., June 23 /PRNewswire/ -- AL AmeriLife First Financial, LLC
(AFF) today requested that the Federal Deposit Insurance Corporation (FDIC)
formally correct the inaccurate and misleading statements contained in their
informational release dated June 19, 2009 relating to AFF. Further, AFF
requested that the FDIC clarify the nature and circumstances of AFF's entry
into a Consent Order with the FDIC regarding AFF's use of the FDIC symbol in
its advertisements of FDIC-insured certificates of deposits (CDs).
The advertisements related to AFF's program featuring FDIC-insured CDs issued
by FDIC-insured institutions and made available to consumers through AFF. The
yield advertised on the CDs included a promotional incentive paid by AFF which
increased the total yield the consumer received. The FDIC symbol, which is
commonly used by FDIC-insured banks in advertisements for FDIC-insured CDs and
other bank products, was featured by AFF in its advertisements for
FDIC-insured CDs, since the CDs being advertised were in fact insured by the
FDIC.
While AFF's advertisements contained a prominent disclosure, the FDIC later
expressed a concern that it believed the use of its FDIC symbol in print
advertisements by AFF, an insurance agency, might confuse consumers into
thinking that AFF itself is FDIC-insured, or that the insurance products
offered through AFF might be FDIC-insured. In response to the FDIC's concern,
AFF voluntarily agreed to discontinue the use of the FDIC symbol in its
advertisements. By entering into the Consent Order, the company believed it
fully addressed the FDIC's concerns by agreeing to not use its symbol in
future promotions in any way that violates the FDIC's Logo Act, and to
advertise only the yield offered by the issuing bank in its CD promotions. The
company did not admit to any violation of law in the Consent Order. In
addition, the FDIC has never made any finding that AFF violated any law or
misrepresented the CDs offered through insured banks.
On Friday, June 19, 2009, the FDIC issued an informational release relating to
the Consent Order entered into between AFF and the FDIC. The FDIC's release
contained a number of factual inaccuracies and material misstatements,
including the statement that AFF is an insurance company (when in fact neither
AFF nor any of its affiliates are an insurance company) and an assertion by
the FDIC that AFF made misrepresentations regarding insured financial products
(when in fact AFF made no such misrepresentations).
AFF has notified the FDIC of the inaccuracies and offered to work with the
FDIC to help them issue a corrected release which represents the true nature
of the Consent Order between AFF and the FDIC. AFF noted that correction of
the inaccuracies is critically important to AFF and its affiliates. (A fact
sheet is attached identifying and correcting the mischaracterizations and
outright mistakes).
"We never agreed with nor understood the allegations made by the FDIC,
however, in order to avoid extended litigation with the FDIC, we agreed to the
Consent Order. It is disappointing that in its June 19th informational
release, the FDIC chose to grossly mischaracterize the Consent Order. We have
been and will always remain committed to the highest ethical standards and
integrity in all of our business dealings," said Timothy North, Chief
Executive Officer.
AFF is considering the options available to it for the purpose of correcting
the FDIC's informational release to ensure that its reputation is protected.
AFF is a network of independently licensed offices throughout the country
offering products to consumers that provide protection of principal and
predictability of investment returns from some of the country's leading
financial institutions.
Factual Errors in FDIC Informational Release
The FDIC's statements contained in its informational release conflict with the
facts of the AFF Consent Order and are contrary to the language of the Order
and Stipulation. Here are examples of the numerous erroneous statements:
-- The informational release refers to "AmeriLife" as an "insurance
company" in the title and in the first paragraph of the press
release. These statements are incorrect. AFF is not an insurance
company and none of its affiliated entities are insurance
companies.
-- The FDIC's informational release states that "AL AmeriLife, LLC"
entered into the settlement. The entity entering into the Consent
Order was "AL AmeriLife First Financial, LLC," which is a different
company.
-- The informational release states that AL AmeriLife, LLC is
responsible for managing AmeriLife First Financial, LLC. This is
an entirely incorrect statement.
-- The informational release is entitled "FDIC Announces Settlement
With Insurance Company for Misuse of the FDIC Logo and Seal and
Misrepresentation of Insured Financial Products."
This is an incorrect statement because the Consent Order and
related documents make it clear that the FDIC made no findings of
fact or conclusions of law. The FDIC never determined anything
that suggested that AFF misused the FDIC logo or that it
misrepresented insured products. Indeed, the issue of advertising
the CD products with a promotional incentive is not within the
scope of, or addressed by, the Logo Act.
-- The FDIC's informational release explicitly states that "The
advertisements, however, misrepresented the actual terms and
conditions under which the bank offered the insured CDs". [second
paragraph]
This statement is erroneous. The FDIC has presented no evidence of
nor made any finding as to misrepresentation. AFF has vigorously
and consistently denied any allegation of misrepresentation
regarding the terms of the CDs.
-- The informational release states that AmeriLife has consented to a
Cease and Desist Order that will correct the violations of the FDI
Act and prevent AmeriLife from using the FDIC sign, seal, and
symbol, and from misrepresenting that its financial products are
insured. [third paragraph]
There is nothing in the Order that prevents AFF or any of its
affiliates from using the FDIC sign, seal or symbol. The Order
states that AFF may not use the FDIC sign, seal and symbol in a
manner that violates the Logo Act.
Moreover, there is nothing in the Order that requires AFF to
correct the violations because there never was a finding of a
violation. The terms of the Order require AFF to not engage in any
Activities that violate Section 18(a)(4) of the FDI Act. There is
no finding of fact, or agreed statement by AFF and the FDIC, that
AFF's current or past activities are in "violation" of Section
18(a)(4).
-- "Any person or business that deceptively uses the FDIC name, logo
or seal to market non-insured financial products should be aware
that the FDIC will pursue and stop these deceptive and damaging
marketing practices." [last paragraph]
This statement clearly indicates that the FDIC regards AFF's
actions as deceptive and damaging, which is not something the FDIC
concluded in its Order.
There is no admission or statement in the Order or Stipulation in
which AFF admitted to "misrepresentation" or "deception" with
respect to either the use of the FDIC logo or the terms of the
certificates of deposit that were made available to customers.
There has been no establishment by the FDIC of any "damage" or harm
to any person from AFF's business or marketing practices. In fact,
customers have greatly benefited from the above-market yields
offered by the CD Program. At all times the customers were offered
and received an FDIC-insured certificate of deposit that yielded a
total return as advertised. AFF has made extensive submissions to
the FDIC staff in support of its position of no damage or harm to
customers and the FDIC has not pointed to a single instance where
anyone was harmed or deceived.
SOURCE AmeriLife First Financial, LLC
Dan Morgan of AmeriLife First Financial, LLC, +1-727-726-0726,
dmorgan@amerilife.net
