Vanguard Faces Class Action Lawsuit Over $100 Account Closure Fee

Posted on April 10th, 2025 at 12:30 PM
Vanguard Faces Class Action Lawsuit Over $100 Account Closure Fee

From the desk of Jim Eccleston at Eccleston Law

Vanguard is facing a federal class-action lawsuit over a $100 fee imposed on brokerage customers who close their accounts and transfer funds to another firm. According to ThinkAdvisor, the lawsuit alleges that the fee constitutes an "unlawful, fraudulent, and unfair assessment."

Vanguard describes the charge as a "processing fee," but the lawsuit argues that the fee is not based on the actual cost of processing account closures. Instead, the complaint characterizes it as a "junk fee" designed to penalize all but the highest-earning customers, discouraging them from leaving Vanguard or punishing them financially if they do. ThinkAdvisor reports that the lawsuit claims that the fee is deceptive, unfair, and imposed in bad faith, asserting that customers had no way to anticipate or avoid it.

The complaint further argues that the fee violates New York state law, which governs Vanguard's brokerage accounts, and disproportionately harms low-to-middle-income consumers while exempting multimillionaires. The fee, along with other new Vanguard charges, took effect on July 1, 2024, after the firm announced the changes two months in advance.

In response, a Vanguard spokesperson stated that the firm had provided clients with advance notice and that the fee complied with all applicable rules and regulations. "We look forward to vigorously defending against this meritless claim," the spokesperson told ThinkAdvisor.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law

Return to Archive

TESTIMONIALS

Previous
Next

Jim, Stephany and the whole team were a God send.  We felt like we were put into a situation where we had no advocate. Jim’s team came in with a strong, well laid out strategy on how to get our story heard. Where our outside compliance company had no ability to help, our Broker Dealer was impenitent, and the regulators were aggressive pursuing vague rules, Jim came like a barricade against an assault we did not understand. Though you pay member dues to be affiliated with FINRA and a B/D, you have no voice. The only thing that is truly heard in this un-level playing field is a bulldog’s bark like Jim’s. I would encourage anyone to call Jim and his team to find a real ally in the tough and complicated world of securities regulation. They are truly the best.

Greg P.

LATEST NEWS AND ARTICLES

September 11, 2025
Montana Federal Judge Allows Family's Premium Financing Claims to Proceed

A federal judge in Montana has allowed a family to move forward with negligence, fraud, and unjust enrichment claims tied to a premium-financed life insurance arrangement valued at $67.5 million.

September 10, 2025
Arizona Man Sentenced to 30 Years for Multi-Million Dollar Ponzi-Style Fraud

An Arizona man has been sentenced to 30 years in prison for running a Ponzi-style investment scheme that defrauded more than 100 victims out of millions of dollars, according to the U.S. Attorney’s Office for the District of New Mexico.

September 9, 2025
Easterly ROCMuni Fund's Steep Decline Spurs Potential Investor Lawsuits

The Easterly ROCMuni High Income Municipal Bond Fund (RMHIX) has suffered a dramatic collapse, losing nearly half its value in June and now trading at a net asset value (NAV) of $2.95 per share.