Citibank froze my account when they received a letter from a collection agency stating they unlawfully deposited a settlement check. The check was made out to 3 parties. The collection agency, the hospital, and myself. Citibank manager has told me I cannot touch my funds until I come to an agreement with the collection agency. What gives citibank the "right" to freeze my funds?? The collection agency has acted deceitful and has yet to supply me with itemized bills that add up to the amount they are asking for. The matter with the collection agency is not settled and may not be for some time. The amount in question is 60% of the funds. Why can I not have access to the other 40% of my money?. The bank representative states the matter is with their legal department and "I" as a consumer, am not allowed to contact them. I know I need to contact a lawyer but liked to know if anyone has had similar experience.

If a check is made out to 3 parties, then all three have to sign it , to make it legal to cash it.

Thus, if all three did not sign it, the company that issued the check and demand that the funds be repaid.
So the check will either not have the signature of the other two parties, or at worst will have been fruaded. If for example and I am sure you did not, if you signed for the other two parties, that is a criminal offence and you can be charged with it, depending on the amount it could be a felony.

So if it is determined that the other two parties did not sign the check, the bank wouild freeze it, till the other parties can reach an agreement on the money.

The check, I will assume from an insurncce company was to be given to the hospital for payment, not put into your bank account.

You need an attorney at this point since this can go down hill for ou quickly.

Yeah that is what they do and you can't close the account and stop payment works against you sometimes. Then they keep adding fees if the withdraw overdraws your account.
When a place is electronically withdrawing my money without permission, or taking it out for the reason they are doing to you, I don't use the account for my money that I need to pay bills.
Then to top it off, they withdraw your money which causes your bills to bounce then the bank now charges $35. Each bounce PLUS approx. 5 dollars a day until you catch up. It cost my son 4 hundred dollars for overdrafting 26 cents and 7 cents cause he couldn't put money in for three weeks.

BUY money orders to pay your bills.

I use to open a second account at another bank but they are all interconnected now so that may not work.