Citibank's big blog faux pas [updated]

This is definitely a case in which "oops" is not enough.

If you don't know Fabulis, it's a start-up founded by successful entrepreneur Jason Goldberg that positions itself as “the social network that helps gay men connect with amazing experiences nearby and around the world." According to the Fabulis blog, yesterday the company's Citibank account was suspended allegedly due to compliance violations due to "questionable content." Yet according to Goldberg, the only content on the site was "good humor, some business insights, and some touching coming out stories from some great and fabulis gay people."

Citibank has appeared to be pretty quiet on this issue, with the only real commentary coming through to use via hearsay on the Fabulis blog. According to the blog, a Citibank manager has apologized for the account suspension, saying that three individuals reviewed the account and that they were "wrong" to do so.

Here's the thing: If it is true that three people reviewed this account and reported it for cancellation, that leads me to believe that there might be something written in Citibank's compliance policies regarding this "questionable content" more than the coincidence of three potentially homophobic people reviewing the account. What could possibly be in these policies?

OH, and when did banks start monitoring blogs?

Citibank's mistake -- and reported handling of this situation -- aside, there's a bigger question in mind. Have corporate blogs become somewhat of a liability?

When companies started posting their own blogs back in Web 1.0 land, concerns over legal liabilities and regulations and even customer perceptions were often top of mind. However I wager a guess that very few companies, whether they be enterprises or start-ups, considered how their blogs' content might impact the compliance policies of their financial institutions.

Should companies even have to worry about this?

I work for a security company. We have a blog. We sometimes write about issues between hackers (the bad guys) and companies (the good guys) or even consumers (also the good guys). If some compliance officer at our bank determined that we're discussing content that is "questionable", are we at risk too? Or is this potential Citibank "compliance" limited to content surrounding a gay lifestyle? Quite frankly, I find hackers to be more dangerous.

Either way, this is a bad situation in which Citibank has some explaining to do, if this all shakes out to be true. Not just explaining to Jason Goldberg and Fabulis, but to its customers, and those people who once considered Citibank a trusted banking brand.

Update: Citibank has issued the following apology to Fabulis.

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.

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.

Thanks to Jason Perlow for the tip.