Man claims TowneBank charged him hidden late fees

HAMPTON ROADS, Va. (WAVY) — 10 On Your Side is looking into a local man’s fight with TowneBank, after he says late fees were charged against him without ever being included in his monthly loan statements.

Larry Wilson reached out to because he thinks the same thing may be happening to others, and he thinks it’s wrong. “What we’ve got here is something people should be aware of,” Wilson said.

Wilson’s former bank, which was bought by TowneBank, gave a 10-day grace period before charging late fees. It’s clear from his promissory note, TowneBank only gives seven days grace. Wilson said he doesn’t dispute that, and that he should have read the note more thoroughly.

So, for years, Wilson thought he had a 10-day grace period and made his payments on the eight or ninth day after they were due. This cost him thousands of dollars in late fees — but he never knew of it because the fees never showed up on his monthly statements.

Wilson owns Peninsula Hardwood Mulch, and his comptroller, Susan Sarro, discovered the “hidden late fees,” as she calls them.

So, Wilson complained to TowneBank President Peninsula/Williamsburg Brian Skinner, who responded in a letter. He said the bank includes reminders for late fees on commercial loans only when the payment is 20 days past due.

“If you have a line item on your statement that says ‘late fee,’ and if there is a late fee, you should get [the fee listed there] whether it is 20 days late or one day,” Wilson said.

10 On Your Side went to Skinner’s office at TowneBank, but he refused to meet with us. We would have asked him about that 20-day late policy, and why that policy wasn’t in Wilson’s promissory note. We would have asked him why the late fees show up in the internal bank records 10 On Your Side obtained on the loan, but never made their way to Wilson’s monthly statements.

Those questions remained unanswered.

Sarro complained to the State Corporation Commission’s Bureau of Financial Institutions: “TowneBank has been unethical and deceptive in the way they handle late fees,” she wrote in the complaint.

Townebank got the point of that. Their lawyer wrote Wilson: “TowneBank will refund the late charges, $4,716.71, as long you provide “confidentiality as to the terms of the agreement … and withdrawal or dismissal of the complaint made to the State Corporation Commission, Bureau of Financial Institutes.”

Wilson doesn’t care about confidentiality, and he doesn’t care about the money.

“It’s $4,700. This is principle with me. If it was being done to me, it could be done to a lot of other people, and it should be corrected,” Wilson said.

In fairness to TowneBank, the Bureau of Financial Institutions later determined this: “We see no evidence that TowneBank is in violation of any banking regulations.”

Just before 10 On Your Side’s report aired Tuesday evening, TowneBank sent over the following statement:

It is both TowneBank’s policy and history to treat all of our members with respect, dignity and fairness and to respond to concerns in a timely manner. That has been the case with Mr. Wilson, and we are more than happy to meet with him again to discuss this matter further. Because of member privacy rules, however, we cannot elaborate through the media. We are pleased, however, that the State Corporation Commission’s Bureau of Financial Institutions found “no evidence that TowneBank is in violation of any banking regulations.” Nonetheless, the community should know that Towne continually reviews its procedures, and in August 2014, we implemented an enhanced billing notice statement that fully describes all transactions, including interest, principal and late charges.

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