A payment processor promised small businesses savings of up to 60 percent. Regulators say many of them ended up paying more instead. The Federal Trade Commission and the state of Washington just reached a settlement with the company accused of making that promise.
This is reporting on a settled legal action. The underlying allegations are not findings of fact, though the company agreed to the settlement terms described below.
Who’s involved and what they’re accused of
The FTC and Washington filed a complaint against Riverside Payments Inc., its affiliate Cascade Equipment Leasing LLC, and owners Brandon Skinner and Jason Reese. The case was filed in federal court for the Western District of Washington on November 2. The agencies say Riverside’s sales materials promised small businesses savings of 40% to 60% compared to their existing payment processor.
Those quote sheets allegedly left out real costs: activation fees, batch fees, data security non-compliance fees, and inactive processing fees. According to the complaint, businesses that actually switched to Riverside typically ended up paying more than they had with their previous provider.
What was buried in the contract
The complaint describes a 26-page electronic contract. It didn’t clearly disclose several things a business owner would want to know upfront. Among them: the contract automatically renewed after its three-year term, a $695 early termination fee applied, and signing also meant an equipment lease with Cascade. That lease renewed for a full year longer than the processing contract itself.
What that meant in practice: a business trying to leave Riverside could find itself still locked into the Cascade equipment lease for a year after the processing contract it thought it was ending.
“Risk-free,” according to the complaint — until you tried to cancel
The FTC says Riverside told businesses cancellation was “risk-free,” and even offered a $500 payment for the “time and hassle.” In practice, the complaint alleges, cancellation was made difficult on purpose. The callbacks businesses were promised often never came.
The agencies also allege Riverside misled its own sales agents, promising annual earnings of $75,000 to $95,000, with top performers making “100k.” The complaint says actual average agent pay was $3,787 a year. That’s a gap large enough to raise questions about who those recruitment numbers were really serving.
What the settlement actually requires
Riverside agreed to pay $600,000. A much larger judgment, $32,083,921, is suspended unless the company is later found to have misrepresented its finances during the settlement process. Businesses currently under a Riverside contract may rescind it without paying a termination penalty. Riverside must also waive early termination and rescission penalties for 60 days, while notifying customers of that option.
Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, put it directly: “The FTC will hold accountable companies that deceive small businesses, whose hard work powers our economy.” The order also bars Riverside, going forward, from misrepresenting costs, savings, or cancellation terms. It requires clear disclosure of material terms before the company can collect a business’s billing information.
What this means if you’re shopping for a processor right now
A “guaranteed savings” percentage is a sales pitch, not a contract term, unless it’s written into the actual agreement with specifics attached. Ask directly what fees sit outside the headline rate — activation, batch, compliance, inactivity — before you compare one quote against another.
If an equipment lease comes bundled with a processing agreement, read its term and renewal date separately from the processing contract’s. The two don’t always end on the same day. That gap is exactly where this case started.
The bottom line
A payment processor promised small businesses savings and easy cancellation, and regulators say it delivered neither. If you’re currently a Riverside Payments customer, the settlement gives you a real window to walk away without a penalty. If you’re evaluating a new processor, this case is a reasonably specific list of questions worth asking before you sign.