Whenever the topic of a suspended user crops up, there's often confusion about what information moderators ought to share and what they should keep private. Sometimes moderators are just as unsure as other users. This can cause all sorts of unnecessary problems.
The immediate effect of a suspension is removal. If a user has been rude or destructive, the community needs that behavior to stop and removing the instigator suffices. However, the long term goal is rehabilitation:
At the end of this timed suspension period, your reputation will be recalculated, and your account will resume as normal. We don't hold grudges. The point of all this is to address the behavior. If the behavior improves, you are welcome back.
I volunteer at the county jail on Saturday mornings. In the jurisdiction I live in, trials are generally open to the public, there are detailed records of the proceedings and, critically, it's easy to find out if a prospective employee has a criminal past. When I talk to inmates, they worry about their family on the outside and whether they will find a way to support them upon release. Although it is illegal to discriminate against people with criminal convictions, getting a job after serving time isn't easy. Some employers, particularly requiring licenses, are prohibited from hiring ex-felons.
In California, ~65% of former prisoners return to prison. That's pretty appalling but not surprising since rehabilitation is not a politically safe goal. On Stack Overflow, ~10% of previously suspended users have received a second suspension. Other sites have similarly low recidivism rates. Some of those users have, perhaps, moved on to other parts of the internet, but many have gone on to be productive members of the network. The evidence suggests we are doing something right when it comes to rehabilitation. I think one factor is that we don't have public listings of previous suspensions.
What can moderators share publicly?
During a suspension, anyone can see that a user has been suspended and broadly why. There's not a lot of benefit for a moderator to do more than point inquisitive users to that part of a suspended user's profile. Since suspended users are unable to tell their side of the story on meta or chat, the less said the better. Hard to think of a better way to turn a user bitter than to humiliate them when they are helpless.
Sometimes, however, the questions about a suspension are . . . pointed. Secretive systems of justice don't tend to be very fair. Since users on the site clean up after bad behavior, it's not very easy for people to even see what the suspended user was doing. It comes down to trusting either the word of a moderator (with inscrutable power) or a fellow user. In these cases, my guiding principles for moderators and CMs are:
Be honest. That might mean telling truths that aren't very flattering of yourself or other people. It might mean highlighting the mistakes of a moderator or community manager. It might mean summarizing information that's not publicly available. It might mean publishing moderator messages and responses. It does not mean publishing potentially personally-identifying information, which is never allowed under the moderator agreement. But honesty must always be balanced with:
Be respectful. I'd say be nice, but that might be misunderstood. Correct misinformation, but don't go out of your way to make people look bad. Focus on the evidence of what happened and avoid assigning motives. Assume good faith and take the time needed to remain civil. Believe it or not, people sometimes respond positively (and rarely negatively) to this sort of generosity of spirit.
In other words, the purpose of secrecy isn't to hide from public scrutiny, but to protect users and the site from needless gossip and drama. If you already have that (and especially if the suspended user instigated it) there's no real reason to keep mum. Better to have informed turmoil than misinformed. Meanwhile, don't stoke the fire by bringing out salacious details that could be left quiet. Nobody said the job of a moderator is easy.
Checks and balances
Of course, we don't always do the best job of letting users know what goes into a suspension. If you've been a model citizen, it might look like a moderator is acting out of spite when they suspend a user you respect. From the outside, it can seem sudden and capricious. And with 610 (and counting) moderators, it's likely some of them are unaware of parts of the process:
The system encourages moderators to warn users before suspending them. Warnings carry no penalties and there is no public record of them. Users have the opportunity to respond to the warning with an explanation of their side of the story. Many users who get warnings are never suspended (87% on Stack Overflow), so this step goes a long way toward preventing suspensions in the first place.
Every message and every suspension is sent to other site moderators and the community team for review. On occasion, we've stepped in to reverse suspensions. Usually the problem is a simple misunderstanding or poor guidance from the system. The community team also has the power to remove a moderator in cases of abuse of power. (This action, thankfully, is very rare.)
The system encourages moderators to follow an escalating scale of suspensions: 7 days, 30 days and a year. Volunteer moderators are not able to suspend longer than a year. Again, the goal is rehabilitation. Believe it or not, many people have come back from a year-long-suspension to resume their productive participation on the site.
I've investigated many, many complaints about moderator abuse, including complaints of unfair suspensions. Overwhelmingly, it's clear our moderators are very careful about suspending users. Obviously, you'll need to take my word for that. But you can see the results of wise moderation when using Stack Exchange sites. The network tends to be free of rudeness and chaos as compared to other, similar networks. A good deal of the credit belongs to the cadre of volunteer moderators who have the power to suspend users.
Parts of this post were copied from my answer on Meta Physics.