5 ms·

If your bank doesn’t like your startup’s blog, they may freeze your funds

151 points by mmaunder 17y ago

dnsworks 17y ago
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/301520.html http://ioerror.livejournal.com/301688.html http://ioerror.livejournal.com/301688.html
jjs 17y ago
Just imagine the outrage if they did this to an individual.
- deleted 17y ago
  [deleted]
- vishaldpatel 17y ago
  No, I'm actually quite outraged that they did this at all.
olefoo 17y ago
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 17y ago
  What bank is it?
  - olefoo 17y ago
    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 17y ago
      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.
    - protomyth 17y ago
      Well, Chase isn't exactly fast at taking money for a payment either. Car loan payments made on the website from another bank's checking account don't seem to hit for 3 to 4 days.
- quellhorst 17y ago
  Big banks are bad about doing this. They delay your funds so that they can actually earn interest on your money while you don't have access to it.
rue 17y ago
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 17y ago
  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 17y ago
    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.
ratsbane 17y ago
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 17y ago
  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.
fbailey 17y ago
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.
justin_vanw 17y ago
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 17y ago
  This story is obviously false rumor. Feel free to mod me back up in 12 hours when this is official.
  - dreyfiz 17y ago
    You are quite mistaken.
    - dreyfiz 17y ago
      Citi has now apologized: http://blog.fabulis.com/post/411819786/reaching-the-citi-limits http://blog.fabulis.com/post/411819786/reaching-the-citi-lim...
  - prawn 17y ago
    It's official. Quote from a Citi representative: "I apologize for any confusion about the status of your account and the Fabulis website. Whatever statements that were made by any Citi representative related to the content of your website were inappropriate and made in error, and I will review in detail what happened. You have my firm commitment on this point."
- webwright 17y ago
  Nope. The blogger worked with the CEO in question for 6 months and they still keep in touch (I did too FWIW). I'm not sure where "he admits is based on unsubstantiated rumors" comes from. He says he got the information from the person whose account was blocked. The CEO. That's about as ironclad as you can get, short of standing over his shoulder at an ATM. I agree with your reaction against internet mobs and think it's ridiculous to attack a company for the act of an individual manager... Citi should get a chance to fix this. But I think your hatred of internet mobs is clouding your judgment a bit... Because you're wrong on this front.
betashop 17y ago
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 17y ago
  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)?
  - InclinedPlane 17y ago
    Just speculating, could be related to the "know your customer" laws: http://en.wikipedia.org/wiki/Know_your_customer http://en.wikipedia.org/wiki/Know_your_customer
  - betashop 17y ago
    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 dome bad judgement.
  - betashop 17y ago
    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 17y ago
dreyfiz 17y ago
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/ http://blog.fabulis.com/
thedp 17y ago
By what fucking law can they block an account? SUE THE LIVING SHIT OUT OF CITIBANK!
patrickgzill 17y ago
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.
st3fan 17y ago
So what was the objectionable content?
ShabbyDoo 17y ago
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 17y ago
citi have climbed down - http://blog.fabulis.com/post/411481294/citi-we-said-what http://blog.fabulis.com/post/411481294/citi-we-said-what
drallison 17y ago
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.

151 points by mmaunder 17y ago

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

jjs 17y ago

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

deleted 17y ago
[deleted]
vishaldpatel 17y ago
No, I'm actually quite outraged that they did this at all.

olefoo 17y ago

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 17y ago
What bank is it?
- olefoo 17y ago
  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 17y ago
    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.
  - protomyth 17y ago
    Well, Chase isn't exactly fast at taking money for a payment either. Car loan payments made on the website from another bank's checking account don't seem to hit for 3 to 4 days.
quellhorst 17y ago
Big banks are bad about doing this. They delay your funds so that they can actually earn interest on your money while you don't have access to it.

rue 17y ago

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 17y ago
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 17y ago
  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.

ratsbane 17y ago

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 17y ago
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.

fbailey 17y ago

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.

justin_vanw 17y ago

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 17y ago
This story is obviously false rumor. Feel free to mod me back up in 12 hours when this is official.
- dreyfiz 17y ago
  You are quite mistaken.
  - dreyfiz 17y ago
    Citi has now apologized: http://blog.fabulis.com/post/411819786/reaching-the-citi-limits http://blog.fabulis.com/post/411819786/reaching-the-citi-lim...
- prawn 17y ago
  It's official. Quote from a Citi representative: "I apologize for any confusion about the status of your account and the Fabulis website. Whatever statements that were made by any Citi representative related to the content of your website were inappropriate and made in error, and I will review in detail what happened. You have my firm commitment on this point."
webwright 17y ago
Nope. The blogger worked with the CEO in question for 6 months and they still keep in touch (I did too FWIW). I'm not sure where "he admits is based on unsubstantiated rumors" comes from. He says he got the information from the person whose account was blocked. The CEO. That's about as ironclad as you can get, short of standing over his shoulder at an ATM. I agree with your reaction against internet mobs and think it's ridiculous to attack a company for the act of an individual manager... Citi should get a chance to fix this. But I think your hatred of internet mobs is clouding your judgment a bit... Because you're wrong on this front.

betashop 17y ago

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 17y ago
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)?
- InclinedPlane 17y ago
  Just speculating, could be related to the "know your customer" laws: http://en.wikipedia.org/wiki/Know_your_customer http://en.wikipedia.org/wiki/Know_your_customer
- betashop 17y ago
  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 dome bad judgement.
- betashop 17y ago
  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 17y ago

dreyfiz 17y ago

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/ http://blog.fabulis.com/

thedp 17y ago

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

patrickgzill 17y ago

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.

st3fan 17y ago

So what was the objectionable content?

ShabbyDoo 17y ago

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 17y ago

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

drallison 17y ago

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.