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

I am grateful to have found an outstanding law firm that specializes in securities matters. My lawyers were extremely knowledgeable, diligent, and are skilled litigators. No stone was left upturned. As a result of their experience and tenacity, the arbitration proceeding was dismissed in my favor.

Michael E.

LATEST NEWS AND ARTICLES

October 13, 2025
Morgan Stanley Cuts Advisor Deferrals in 2026 Compensation Plan, Boosting Advisor Payouts

Morgan Stanley Wealth Management announced a significant change to its 2026 compensation plan, cutting advisor deferral rates by half while keeping total pay and grid structures largely unchanged.

October 10, 2025
Former Two Sigma Quant Researcher Faces Fraud Charges Over Manipulated Models

Federal prosecutors and the Securities and Exchange Commission (SEC) have filed parallel actions against Jian Wu, a former quantitative researcher at Two Sigma Investments, alleging he secretly manipulated algorithmic trading models to boost his own compensation by millions of dollars.

October 9, 2025
Former Merrill Lynch Advisors Fight Allegations of Corporate Raid

A dozen former Merrill Lynch advisors who launched their own firm, OpenArc Corporate Advisory, in Atlanta are pushing back against accusations that they orchestrated a “pre-meditated corporate raid.”