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

Fantastic news!!!!  Your professionalism, support and expertise were greatly appreciated.  You made a difficult situation much more bearable.

Marci M.

LATEST NEWS AND ARTICLES

September 15, 2025
California Young-Gun Investor Charged in Alleged $6 Million Ponzi Scheme

Federal prosecutors have accused Mihir Deepak Sukthankar, a California resident once celebrated as a teenage trading “prodigy,” of orchestrating a multi-million-dollar Ponzi scheme.

September 12, 2025
LPL Broker Fined and Suspended for Recommending Risky Investments to Elderly Client

An LPL Financial broker in Elizabethtown, Kentucky, has agreed to sanctions after FINRA found he violated Regulation Best Interest (Reg BI) when recommending unsuitable investments to an elderly customer.

 

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.