UBS apparently offers some investment accounts for which the fees can constitute an effective $8,800 per trade. They’ve been sued by the New York Attorney General and will now pay $21.3 million to settle those charges.
I can’t help but wonder, taking all the fees charged in the 3,000 affected accounts, and subtracting the $21.3 million fine, if the investment company still comes out ahead. One customer in the example was charged $35,000 in fees. If we assume that’s high and go with an average $20,000 for all of the 3,000 accounts, that’s a total of of $60 million.
I could be way off on the average fees, but $21.3 million no longer seems like a stiff penalty. It’s more like paying extra tax on the income.
Meanwhile, I’ve paid no outright fees in my investment accounts over the past few years. I hope that when I’m 91 years old, I’ll still have the mental faculty to avoid being suckered into bad deals. More importantly, I just hope I live that long and maintain any sort of mental faculty at all.
UBS Settles Fee-Based Charges for $23.3 Million [Marketwatch]
Updated May 26, 2009 and originally published July 16, 2007. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.