My Bank Blacklisted Me And Are Withholding My Funds By (falsely) Claiming Fraud

Let me know if there is a better subreddit for this, this will be a post questioning financial law.

So, almost 4 years ago I freshly turned 18 and opened my very first personal checking account with a very large US bank. This is around the time I was starting college and didn't have a steady income, so the account balance was pretty much at zero at that point.

I never set up direct deposit for my financial aid so a few weeks into the semester, my school sends me some physical checks that basically make up my financial aid refund. Given that these refunds are supposed to cover a US school's tuition, they are pretty hefty (like THOUSANDS of dollars). I decide to deposit those checks into my new checking account.

A few weeks later, I am unable to sign into the bank's website. Instead, an error message tells me that I am blocked from logging in and I must contact customer service to regain access. I call the number they provided, am put on hold for an hour, and am then told that my account has been flagged by the fraud department. This is kind of valid, I guess, since a sudden large amount of money in a brand new account would make anyone suspicious.

Anyway, I am told that I need to either provide some sort of proof that the checks are legitimate or to contact the issuer of the check to withdraw the money. Since I still wanted to remain a customer I was under the impression that account could be saved. I naively thought that these representatives knew what they were doing. I spend the next few days waking up at 6am to call customer services and spend countless hours on hold to re-explain my situation dozens of times. Sometimes the calls would literally just cut out in the middle and I'd have to join the queue all over again. I send them my financial aid letters, but they keep insisting that they need more proof so I send them scans of the checks, and even a letter from my financial aid department that confirms that these checks were issued by them. I even haul myself to a local branch of this bank so that I can talk about this to someone in person.

Finally, after WEEKS of calling and following up, a representative tells me what I should've been told from the beginning: your account is permanently locked and that I should "give up." Every representative after him is telling me the same now. The only thing I can do it to have the issuer of the check pull the money from the account. However, it's November at that point and the checks have expired. According to the third-party company that issued the check, there's nothing they can do and it's up to the bank to release the funds. bruh

Well, losing so much money, in addition to dealing with my first semester of college, was extremely stressful so I decided to let it go. I was also just so upset that I was led to believe that there was hope of the funds being released. I felt like I wasted so much time running around and collecting all of these documents that didn't even help my case. Last month I was actually able to get contact information of a more direct customer service representative who was pretty proactive about communicating with me and corporate but even she reached the same conclusion. The fraud department essentially banned me and is refusing to provide an explanation. I also asked her if I could be connected with fraud, but they refuse to speak to me as well.

I know that by creating the checking account I probably signed some user agreement that grants the bank full control of my funds, but I still feel wronged. I feel like I didn't do anything wrong. Currently I'd even be happy with a simple explanation for why they settled on my verdict.

Can anyone who knows how banks operate maybe pinpoint what went wrong? Should I keep bothering them or is this a lost cause? Could I sue? I still believe I deserve to get my money back.

Location: California, United States