Raymond James Will Pay $15M To Settle Hidden Fees Case

In a proposed settlement deal, Raymond James Financial has agreed to pay $15 million to settle claims that the company charged customers unauthorized, hidden fees.

Some 59,000 customers are part of the proposed Class that will benefit from the settlement. These consumers were allegedly hit with an inflated processing fee that was actually an unauthorized commission.

The hidden fees settlement deal reportedly came after “years of hard-fought litigation.” Consumers may  have been able to receive betweem $30 million and $40 million had the unauthorized fees class action lawsuit made it to court. The settlement deal allows customers to avoid the potential costs and risk of continuing to litigate the claims.

The unauthorized fees class action lawsuit began as two separate class action lawsuits that were then consolidated into one for the purposes of settlement, according to the proposed settlement deal.

The first of the two Raymond James fees class action lawsuits was filed by Jyll Brink in February 2015. She claimed that Raymond James charged customers a processing fee that is unreasonably high — one that customers allegedly did not authorize. She claims the fee was higher than the cost of processing services.

Allegedly, these hidden fees are known by a number of names, including a processing fee, a miscellaneous fee, or others. According to Brink, these fees are charged to accounts that are advertised as commission-free and exist solely to profit the company.

Brink calls the unauthorized fees de-facto commissions. She argues that in charging these fees, Raymond James is effectively deceiving customers into thinking they are receiving a commission-free account when really, they are being charged a commission under a different name.

Caleb Wistar and Ernest Mayeux filed the other Raymond James unauthorized fees class action lawsuit. Their claims were similar to Brink’s, but their Cass was not certified.

After a judge consolidated the fee class action lawsuits, Raymond James requested a summary judgment. U.S. District Court Judge William P. Dimitrouleas then certified a class of nearly 59,000 policy and account holders.

Judge Dimitrouleas said he was not persuaded by Raymond James’s attempt to claim that the class should not be carried because it would require account reviews of each customer to determine who qualified as a class member. Brink had argued that the company’s records were sufficient to enable a calculation to determine which customers had paid the fee.

Judge Dimitrouleas did excuse account holders whose financial advisors covered the fees for the customer from the class of customers, limiting the class to those customers who actually paid the fee.

In the proposed settlement deal, two classes of customers were established: Those covered by Brink’s claim, which are customers  charged fees on commission-free accounts between February 17, 2010, and March 31, 2017; and customers in a class covered by Wistar and Mayoux’s claims who paid fees on commission-free accounts between February 11, 2011, and June 30, 2019.

U.S. News notes that customers may face a range of hidden fees in banking and other industries. Hiding fees may be a way for businesses and retailers to make services and goods appear less expensive than they are, which can entice customers into making purchases that they otherwise would not. MarketWatch notes that hidden fees charged by financial advisors and institutions can have a serious impact on a person’s financial health and wealth accumulation.

The Raymond James Hidden Fees Class Action Lawsuits are Brink et al. v. Raymond James & Associates Inc., Case No. 0:15-cv-60334, and Wistar et al. v. Raymond James Financial Services et al., Case No. 0:16-cv-60284, both in the U.S. District Court for the Southern District of Florida.
UPDATE: August 2019, the Raymond James commission fee class action settlement is now open.Click here to learn more. 

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This article is not legal advice. It is presented
for informational purposes only.