Vanguard Facing Class Action Lawsuit Over Allegedly ‘Unfair’ $100 Account Closure Fee for Non- Multimillionaires

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A proposed class action lawsuit alleges The Vanguard Group unfairly charges customers with less than $5 million in assets a $100 processing fee to close their brokerage account and transfer their funds to another investment firm.

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The 24-page case says that Vanguard’s transfer-out fee, which the defendant began imposing on brokerage accountholders in July 2024 along with a host of other new charges, is supposedly tied to the cost of processing account closures. In reality, there is very little “processing” costs associated with closing an account, the complaint claims.

According to the lawsuit, the expense is no more than a profit generator designed to penalize average consumers who wish to take their business elsewhere.

The suit claims the $100 exit charge—formally dubbed by Vanguard as an “account closure and full transfer out fee”—is an illegal “junk fee.” The Consumer Financial Protection Bureau describes junk fees as unavoidable, unexpected and excessive charges that have little or no added value to the consumer, the filing relays.

Indeed, the case notes that “because the fee is new, consumers had no way to anticipate the fee at the time they opened their account at Vanguard and had no way to avoid the fee once it had been added.”

“This is a classic ‘unfair’ business practice,” the suit contends, claiming that Vanguard initially “lured” customers into brokerage contracts with the promises of minimal fees.

Per the filing, Vanguard has historically marketed itself as a leader in low-cost investing, attracting low-to-middle-class consumers seeking an affordable opportunity to build wealth. The complaint argues that the defendant has recently walked back on its stated mission through the imposition of “anti-consumer” fees that disproportionately impact ordinary accountholders while expressly exempting multimillionaires.

The lawsuit looks to represent any Vanguard brokerage accountholders who, during the applicable statute of limitations period, paid an account closure and full transfer out fee to the investment firm.

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