FTC and Washington State Secure Settlement Over Deceptive Payment‑Processing Practices

Settlement Details and Financial Penalty

The Federal Trade Commission and the State of Washington announced that Riverside Payments Inc., its affiliate Cascade Equipment Leasing LLC, and the companies' owners will pay a reduced sum of $600,000 to resolve the allegations. The larger judgment of more than $32 million will be suspended pending payment, and could be reinstated if the defendants are found to have misrepresented their finances.

What Small Businesses Gained

Under the proposed order, small‑business merchants can rescind their processing agreements without incurring the previously disclosed $695 early‑termination fee. The defendants must also waive any penalty for a 60‑day period, giving merchants a clear path to exit the contracts.

Key Misrepresentations Cited by the FTC

The complaint says Riverside promised significant savings while enrolling merchants in automatically renewing contracts for both processing services and equipment leasing. Sales materials allegedly omitted activation, batch and other fees, and the 26‑page electronic contract buried details about renewal terms and termination costs. The FTC also highlighted that Riverside advertised a "no‑risk" cancellation guarantee and a $500 reimbursement for switching back, yet merchants reported repeated dead‑ends when trying to cancel.

Future Compliance Requirements

The order bars the companies from misrepresenting costs, savings, cancellation conditions or any material fact about their services. It also requires clear, conspicuous disclosure of all material terms before billing information is collected, explicit informed consent for any negative‑option billing, and a simple cancellation mechanism. Violations could trigger further enforcement action.