

If your bank doesn’t like your startup’s blog, they may freeze your funds - mmaunder
http://markmaunder.com/2010/if-your-bank-doesnt-like-your-startups-blog-they-may-freeze-your-funds/

======
betashop
Hey. Jason Goldberg here. Do I think Citibank or Citigroup is a homophobic
malicious company? No. Do I think some compliance officer is a moron who made
a really stupid decision? Yes. Three hours of trying to sort this out provided
even more comedic insanity than I even revealed on the blog post. Including a
bank manager who didn't want to talk about this because she was uncomfortable
talking about the content of our blog over a recorded phone conversation. Oh,
and we've learned that the account was marked to be a cancelled by said
compliance officer for this "objectionable content." wtf.

All we know so far is that we finally got someone to lift the block on the
account, but that the best she could promise is another review of the
situation today.

insanity.

~~~
ohashi
Why is a bank even looking at your content out of curiosity? Should it matter
unless you're violating the law (and presumably a judge can tell them to
freeze/cancel your accounts at that point)?

~~~
betashop
Right? I'm told that irbid standard practice for a compliance officer to
review new business acccounts shortly after they are opened. This individual
clearly had some bad judgement.

~~~
rubyrescue
I started opening an account with HSBC in the states last month and they were
noticeably wary until they saw a web page for my company - the Patriot act was
specifically mentioned - it seems that the due diligence requirements for new
accounts is very high.

~~~
theBobMcCormick
That's an odd thing for them to look for. Almost any dufus with FrontPage,etc.
could put up a reasonably businessy looking website. I don't expect bankers to
be internet experts, but I would think they'd realize that the presence of a
website isn't much of a proof of legitimacy.

As an interesting counter-anecdote, I recently opened a business account with
TCF bank. We definitely didn't have our website up (not sure we'd even
registered a domain name at that point). TCF didn't seem to have any interest
in our web site, they just wanted our federally issued EIN and a copy of our
business registration with the state (in our case, Articles of Organization
for an LLC.). IMHO, those seem like sensible documents for them to request. A
website? Not so much.

~~~
rubyrescue
Agreed, but most bankers aren't paid to think anymore. I had those other
documents in hand as well... but, show the website... whatever works.

Perhaps there is a secret thrill in being a banker who may one day catch a
Patriot Act violator, or even a $200 bonus?

------
ratsbane
Just reading that blog post it sounds as if Citi behaved monstrously. Big
banks are an easy target; frequently, I suspect, with justification. I
personally don't like big banks; I use a small one. But...

There's a lot that post didn't say. Was the block just a temporary hold? What
was the source of the funds? Was it a merchant account? If so the bank may
have been justified in holding deposits longer if there had been more
chargebacks than anticipated or even if the nature of the business indicated a
likelihood of greater chargebacks.

If the reason Citi gave, as quoted by the Fabulis founder, was because of
objectionable content in a blog might that just indicate the bank had rightly
or wrongly reclassified the type of business based on blog contents?

~~~
rue
Good point about reclassification; actual "objectionable content"* could cause
law enforcement to order a hold but those are disclosed to the accountholder.
Another issue might be an account opened for a non-profit or some other
account type problem. Yet another could be a suspected misrepresentation in
account documentation but that would be more likely in case of a loan of some
type.

------
rue
Needs _much_ more detail and some type of corroboration.

Existing laws, threat of lawsuit and just plain bad PR means this is something
a bank would be very unlikely to do.

~~~
wvenable
My family has had some personal experience with banks freezing accounts -- it
can be done on the whim of a single person. That person probably didn't think
of any of those consequences in this instance.

~~~
rue
That is certainly true, it just seems very unlikely. Particularly if it is an
_account_ hold, not a blocked card or held deposit or something.

It is definitely not beyond the realm of possibility that some "morally
enraged" or otherwise vindictive person might have done so. But they usually
have some cover story in those cases, too.

------
olefoo
I wonder if some of these banks are perhaps a bit less solvent than they would
like to be still. I've noticed that it takes my current bank an outrageously
long time (4 days) to move money between accounts unless someone goes down to
the branch and manually signs the transaction. It's annoying to know that the
web interface, though convenient and handy will impose a wait state where the
money is not in either account for several days; whereas taking 15 minutes to
go to the branch will cause the money to move right away.

~~~
democracy
What bank is it?

~~~
olefoo
Chase, formerly WAMU; I rather suspect it may have something to do with the
fact that some of the accounts were opened after Chase took over and the
destination accounts were with WAMU long before. But of course they aren't
going to tell me they can't mesh the two computer systems smoothly.

~~~
rue
No experience with Chase's site, but make sure you are indeed making a
transfer and not an "online (bill) payment." The bank is also required to
provide you with an availability schedule (and, if I recall correctly, inform
you when you make the transfer) so make sure you get a Terms & Conditions
booklet where this is explained. Transfers between two personal checking
accounts should always complete within a business day; savings- and business
accounts may be different.

They might certainly have some loophole, but they must be able to explain it.

------
dreyfiz
Parenthetical, but I really like the use of -webkit-transition in the Fabulis
blog's stylesheet. I wasn't even aware of this extension to CSS, so I
fruitlessly searched to find the javascript that was making it happen, until I
finally got the idea to check the CSS. Try resizing the page in Safari,
Chrome, or Webkit (cmd-plus or cmd-minus) and notice what happens with the
links.

<http://blog.fabulis.com/>

------
patrickgzill
Big banks are at least as evil as big telecoms; switching to a regional bank
might be a good move and result in far better service.

------
drallison
The Citibank response to this problem. Whatever actually happened, the issues
seems to have been resolved and written off as a "misunderstanding".

STATEMENT

Citibank sincerely apologizes to Mr. Goldberg for this misunderstanding. This
situation had nothing to do with the content of his web site and any comments
by our staff to the contrary were incorrect; we are reviewing what happened.
This was a technical issue about missing documentation that is required for
new business accounts. Once we resolved the situation, we unblocked the
account immediately. Mr. Goldberg is a valued customer and we appreciate his
business. Also, Citi is strongly committed to diversity, including support for
the gay, lesbian, bisexual and transgender community, and other organizations
promoting diversity. In fact, this week Citi has announced the financing for
the True Colors Residence, a housing facility for homeless GLBT youth in New
York City.

------
fbailey
Jason seems to be a pretty competent guy, met him after the socialmedian
aquisition here in germany. And this is not his first startup, I can't really
imagine that he pulled off samething shady, so all the fault to citi.

------
st3fan
So what was the objectionable content?

------
ShabbyDoo
I am confused. What are the relevant US laws that allow banks to freeze
accounts? Does Citi's accountholder agreement make provisions for such a
freeze? If, as some here have conjectured, the issue was with an attached
merchant account, why not just cut off the ability to accept plastic?

If AdultFriendFinder can exist and take credit cards, then there must not be
any [Edit: at least sex-related] business "content"-based laws which allow
freezing assets.

------
andrewcooke
citi have climbed down - <http://blog.fabulis.com/post/411481294/citi-we-said-
what>

------
jjs
Just imagine the outrage if they did this to an individual.

~~~
vishaldpatel
No, I'm actually quite outraged that they did this at all.

------
dnsworks
Whenever I see a citibank logo, I think about these two related blog posts
from 5 years ago:

<http://ioerror.livejournal.com/301520.html>
<http://ioerror.livejournal.com/301688.html>

------
thedp
By what fucking law can they block an account? SUE THE LIVING SHIT OUT OF
CITIBANK!

------
justin_vanw
So there is this absurd rumor, see, and it is totally unsubstantiated, so it
is probably true right? I mean, what is more likely, that citibank is breaking
federal law and has lots of rules in place that will basically send all their
depositors running for the hills _for no reason_ , and which are on their face
totally absurd... or this idiot blogger has the story which he admit is based
entirely on unsubstantiated rumors wrong?

Epic Hacker News Fail.

~~~
justin_vanw
This story is obviously false rumor. Feel free to mod me back up in 12 hours
when this is official.

~~~
dreyfiz
You are quite mistaken.

~~~
dreyfiz
Citi has now apologized:

[http://blog.fabulis.com/post/411819786/reaching-the-citi-
lim...](http://blog.fabulis.com/post/411819786/reaching-the-citi-limits)

