Riverside Payments customers would get a temporary way out of their payment-processing contracts without an early termination penalty under a proposed settlement announced November 2 by the Federal Trade Commission and Washington state. The equipment leases sold alongside those services would remain a separate obligation.
The FTC says Riverside, affiliate Cascade Equipment Leasing and operators Brandon Skinner and Jason Reese would pay $600,000 to resolve allegations about promised savings, undisclosed charges and difficult cancellations. The FTC describes the agreement as a proposed order, which requires a judge's signature to become binding.
Two contracts with different end dates
Filed November 2 in the U.S. District Court for the Western District of Washington, the case names both companies and their two operators.
The complaint describes a three-year processing agreement and a separate, noncancelable four-year equipment lease. Both could renew automatically. Regulators allege the processing contract carried a $695 early termination fee that sales agents did not adequately disclose.
They also allege customers received savings projections that omitted charges, including activation and batch fees, and that some businesses paid more than with their previous provider. The settlement does not establish those allegations as trial findings.
According to the complaint, Riverside and Cascade serve small businesses nationwide, including restaurants and retail shops. The companies allegedly gathered bank information before customers received the approximately 26-page agreement containing material terms.
Before this action, payment-cost auditing firm weAudit's October review had already identified the separation between Riverside's merchant account and its equipment lease as a recurring source of cancellation complaints. Its review described a 48-month lease and warned that leaving the merchant account could leave the hardware commitment intact. That review predates the November settlement announcement; it provides contract background, not confirmation that the proposed relief is operating.
The term difference is a full year: a three-year processing contract runs 36 months, while a four-year lease runs 48. A business reaching the end of the processing term could therefore still have 12 months left on the original equipment term. Renewal provisions can extend the relationship further.
For an owner weighing a switch, the processing exit fee and the remaining lease payments are two separate costs. The proposed waiver addresses the first. A customer comparing replacement providers still needs the lease balance and end date to calculate the cost of leaving.
The proposed cancellation window
Under Section VII and the customer-notice attachment, Riverside would email affected merchants within 30 days after entry of the order. Customers would have 60 days from receiving that notice to request cancellation without the processing termination penalty.
The notice says processing would end when the next billing cycle closes. Equipment leases would continue under their original terms. The draft notice also says customers must cancel and return leased equipment to prevent the lease from renewing after its four-year term.
The published document leaves the judge's signature and order date blank. It does not establish that customers' 60-day windows have started. The defendants neither admit nor deny the allegations, apart from facts needed to establish jurisdiction.
How refunds would work
The proposed order calls for refunds based on merchants' processing volume during the six months before the order. The FTC would approve or modify the distribution plan. The notice anticipates automatic bank-account credits, with amounts varying by account size, whether a merchant leaves or stays.
The proposed monetary judgment totals $32,083,921. Most would be suspended after the $600,000 payment because of the defendants' inability to pay, according to the FTC. The full amount could become due if their financial disclosures prove false. That larger judgment is not the amount currently available for customer refunds.
The settlement also would bar misleading cost, savings and cancellation claims and require clear disclosures and informed consent for automatically renewing arrangements. It would require a simple cancellation mechanism.
