Harris Direct Failure To Disclose Fees

This is a complaint against Harrisdirect that relates to their failure to disclose certain fees when persons open an account at their web site at http://harrisdirect.com .

To explain how they fail to disclose fees, one must understand the steps a person familiar with using the internet and familiar with brokerage services could be expected to take when visiting the Harrisdirect web site.

I have chosen this standard for the visitor. One could argue that there should be a stronger standard, e.g. for persons who are less familiar with the web or with brokerage services. But since Harrisdirect has chosen to design their web site so as to hide material fees in such a way that even an experienced person would not find them, it's not necessary to argue that their web site should make the fees in question apparent to less experienced persons as well.

Suppose someone visiting the Harrisdirect web site chose to open an IRA account without checking on fees. Here are the steps:

click on apply online
click on traditional IRA
complete the online application form

At this point, the adoption agreement will be presented. There has been no reference to the dollar amounts of any specific fees, though among the thousands of words included in the disclosure is the following paragraph:

In the event of Account termination either by you or by Harrisdirect LLC, for any reason, Harrisdirect LLC, shall be entitled to receive the full termination fee, along with the full, nonprorated current year maintenance fee, regardless of the date during the year of the termination of the Custodial Account.

Of note is that in this scenario, prior to submitting a purportedly binding document, there has been no disclosure of fees.

The problem with the above scenario is that the new customer has failed to exercise due care in determining what the ordinary fees associated with this account are. The prospective customer should first have checked the web site to find out what the fees are. Here's the suggest path a person might take:

click on products & services
as it turns out, the page that's displayed has no links relevant to IRAs or retirement accounts
choose the link of last resort, the site map
click on the choose the right account link, maybe that will help
you hit pay dirt, there's information on retirement accounts including information about IRAs
lose a turn, there's no information about fees, so click the back button
click the commissions & fees link
you hit pay dirt, you have located their page which describes trading commissions
if you're satisfied with the commission schedule, click on apply online
go through the online application procedure
read every last word of the disclosures, or don't... there's really no clue that there are any fees they haven't disclosed to you
sign the application electronically and arrange for funds to be deposited into the account
you lose... from $75 to $110, because you failed to notice that the commissions & fees page had links to many other types of fees, such as account maintenance and termination fees.

If you have opened an account through the Harrisdirect web site and were not aware of account maintenance and/or account termination fees that were applicable to that account, please contact me. Thank you.

The following terms are included to aid search engines: Harrisdirect LLC fraud fraudulent scam stock broker unconscionable agreement

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