Hamed Wardak, Entrepreneur
A popular online political website, Newsmax, has been called to account by the Federal Deposit Insurance Company to “issue a correction” and to “stop publishing” ads with what the FDIC calls “false claims” being made by a specific precious metals trader, which advertises through Newsmax media properties.
In the statement, the FDIC said the company, which will not be named here, must immediately “stop and correct its misleading advertising that falsely claims consumers’ FDIC-insured deposits are at risk of forfeiture…”
The demand comes after an email advertisement was sent out in mid-March indicating that federal law could allow banks to “seize money from checking, savings, and other accounts” and that the government could then “use those funds when necessary…”
The FDIC statement called those assertions false, calling the relevant federal law “clear… insured deposits would be fully protected up to the $250,000 limit.” In addition, the Company called on Newsmax Media, which owns a print publication as well as a website, to pull the “false” advertising. To this point, Newsmax CEO Chris Ruddy had not responded to these requests or statements, nor has a representative from the precious metals company made a media statement in response. The FDIC, however, is talking to the media. Brian Sullivan, FDIC spokesperson, told CNN Business that Newsmax is “unresponsive” to their demands, not responding to any contacts. This potential legal battle falls under the purview of consumer PR because right now many consumers are worried or afraid… and they’re looking with more scrutiny at brands that seem to be taking advantage of that fear. The FDIC is cognizant of this, arguing that Americans are more likely to be worried about the security of their financial assets during this relatively unprecedented time of financial difficulty combined with the unknown related to the COVID-19 pandemic. Regulators, says the FDIC, are working round-the-clock to help stave off panic of the sort that has caused runs on banks in the past. In fact, they argue, the FDIC was created to protect depositors in similar circumstances. Thus, their position is that insinuating that Americans’ money may not be safe could “add more stress” to banks, leading to more financial panic.
It’s a fair point, clearly articulated, that Newsmax has yet to respond to. The media company does have a history of reporting issues through a very specific lens meant to attract a certain audience. Thus, while they have yet to respond, they may argue that they are just giving their audience the kind of news they want to read.