Dear Bank: Get Out of Our Blogs and Bedrooms

Last week, TechCrunch reported on something terrifying: Citibank had blocked the business account of the brand-spanking new startup fabulis due to what they were calling “objectionable content” on the fabulis company blog.

What’s objectionable? Fabulis is a soon-to-launch social network seeking to connect gay men with amazing experiences around the world. From TechCrunch:

Could that be what Citibank is objecting against rather than the content on the blog, which is perfectly innocent any way you look at it indeed?

Now, in case you don’t know Goldberg: he’s an accomplished Internet entrepreneur, who had stints at the White House, AOL and T-Mobile under his belt before founding Jobster (and raising more than $50 million for the startup) and after that socialmedian (which he sold to Xing in December 2008).

For his latest startup fabulis, Goldberg has raised $625k in seed funding from the likes of Washington Post and Venture Partner at Mayfield Fund Allen Morgan, and essentially aims to become the leading social network and lifestyle website for homosexual men.

“And wtf. When did Citibank start reviewing blogs to decide who can bank with them?” asked fabulis founder Jason Goldberg in a blog post on the matter.

After more discussions with Citibank representatives, Goldberg learned that the bank had terminated the fabulis business account because the “content was not in compliance with Citibank’s standard policies.” Kater, a bank rep called to apologize, saying: “all 3 of the citibank individuals who over the past 24 hours each individually claimed that fabulis’ account was to be terminated for compliance issues around the content of our site, were all wrong to have said what they said.”

Eventually, fabulis received an apology from Bill Brown, who says he’s responsible for the Citibank Branches in Manhattan which said:

Jason,

We have not been formally introduced and I imagine that this is a poor way to become acquainted. I am responsible for the Citibank Branches in Manhattan and have just learned today of the challenges you have experienced in opening an account with us.

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.

I truly regret any unintended message that my employees may have conveyed about your new business venture. I place great value on your business and assure you that Citi is committed to the gay, lesbian, bisexual and transgender communities. 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.

I recognize that, to this point, this dialogue has been carried out on the internet via postings. You may choose to post this apology, however, please do not doubt the sincerity of my message and the responsibility I have for ensuring our customers do not encounter a similar experience.

Safe travels,

Bill Brown

Embarrassed by the internet shitstorm that ensued, Citibank has gone a step further. According to a new report on TechCrunch, the bank is now reviewing and making changes to policies for their internet business account costumers.

Citibank Message About Internet Business Accounts

At Citibank, we have learned a great deal from recent customer issues related to Internet business accounts. Mistakes were made in some instances, in which we apologized and corrected the problem. These issues made it clear to us that the language in our branch procedures was not specific enough and left too much room for interpretation from one account to the next.

We recognized that we needed clearer and less subjective guidelines with regard to opening Internet business accounts. And there were clearly gaps in training and communications around these specific branch procedures. Based on all these learnings, we’ve taken action and this week we updated and clarified our procedures for opening all Internet business accounts.

Banks are required by law to conduct due diligence and understand the nature of business accounts. For Internet business accounts, we have made it clearer to our bankers what the due diligence process entails. For example, we will continue to reserve the right to decline or suspend an account if we find illegal or discriminatory content, or if the site involves gambling or pornography. Beyond that specific due diligence, however, we do not monitor or evaluate our customers’ web content.

We are providing additional training in this area to ensure the procedures are uniformly and correctly followed. Also, our bankers are now required to have additional consultation with senior level banking executives when questions arise about these accounts before making any final decisions. This will help to avoid misunderstanding and subjective decisions, and promote greater consistency throughout the process. And we remain committed to working with our customers to try to resolve any issues.

As a global organization, we also recognize the power and promise of diversity. In that spirit, we reiterate Citi’s commitment to serving customers, hiring talent and supporting a broad array of organizations that promote diversity. To learn more about our diversity efforts, please visit: http://www.citigroup.com/citi/citizen/diversity/index.htm.

These recent customer issues have been a useful learning experience for us. We again apologize for any misunderstandings that may have occurred. We are committed to improving every day and we’re working to better serve our customers.

One small victory for freedom in the age of accountability thanks to the internet. We consumers have a platform and a choice. Kudos to Citibank for taking note and addressing their epic #fail.