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The FTC and Washington state filed a proposed settlement with Riverside Payments, Cascade Equipment Leasing and their operators over allegations of misleading small businesses about processing costs and cancellation terms. The agreement calls for $600,000 in payment, a 60-day period to rescind processing agreements without a termination penalty, and new disclosure and cancellation requirements. The allegations have not been established in court; the order takes effect if approved and signed by a federal judge.
The Federal Trade Commission and Washington state have filed a proposed settlement with payment processor Riverside Payments Inc., affiliate Cascade Equipment Leasing LLC and their operators, resolving allegations that they misled small businesses about costs and made it difficult to cancel services. The agreement calls for $600,000 in payment and gives affected customers a 60-day window to rescind processing agreements without an early termination penalty, if a federal judge approves the order.
The complaint names Riverside, Cascade and owners and executives Brandon Skinner and Jason Reese. The FTC and Washington allege that Riverside sales representatives promised businesses savings of 40% to 60% compared with their existing processors, while customers who switched typically ended up paying more. The agencies say Riverside’s quote sheets omitted charges including activation and batch fees, as well as fees tied to alleged data-security noncompliance or inactive processing.
The agencies also allege that sales agents did not clearly explain the agreements’ automatic renewals and contract terms. According to the complaint, a 26-page electronic contract disclosed a $695 early termination fee and an initial three-year processing term that renewed automatically. Equipment leases through Cascade allegedly renewed automatically as well and lasted one year longer than the processing contracts.
Despite a purported “no-risk” cancellation guarantee, the complaint says customers were falsely told they could leave without a penalty, return to their previous processor and receive $500 for their time and hassle. Businesses seeking to cancel allegedly struggled to reach the company, faced repeated calls and deflections, or waited for callbacks that often did not arrive. The settlement would require notice to customers that, for 60 days, Riverside will waive the termination fee or other penalty for rescinding merchant-processing agreements.
The proposed order sets a judgment of $32,083,921 against the defendants, but suspends it after the $600,000 payment based on their asserted inability to pay the full amount. The full judgment would become due if they are found to have misrepresented their finances. The order would also bar misrepresentations about costs, savings and cancellation terms, as well as unsubstantiated savings and earnings claims. It would require clear disclosure of material terms before billing information is collected, informed consent for negative-option billing, and a simple cancellation method.
Consumer protection • Proposed federal settlement
Payment processor claims meet a proposed court order
The FTC and Washington state say Riverside Payments and Cascade Equipment Leasing misled small businesses about processing costs and cancellation. The proposed agreement pairs customer exit rights with new rules for disclosures, savings claims and recurring charges.
Payment under an order that still requires a federal judge’s approval and signature.
Covered customers could cancel processing agreements without a termination penalty.
Pending judicial approvalSettlement amount
To rescind covered agreements
Suspended after payment, based on claimed inability to pay
Order takes effect if approved and signed
What the agreement would change
The proposed terms respond to alleged gaps between sales pitches, contract terms and the process for leaving a service.
Penalty-free rescission
Defendants would notify customers of a 60-day period to rescind merchant-processing agreements without an early termination fee or other penalty.
Disclose before billing
Material terms would need to be clearly disclosed before billing information is collected, with informed consent for negative-option billing.
A usable way to cancel
The order would require a simple cancellation method and prohibit misrepresentations about costs, savings and cancellation terms.
How the sales pitch allegedly diverged from the contract
These claims have not been established in court. The complaint names Riverside, Cascade, Brandon Skinner and Jason Reese.
Costs, renewals and cancellation
The FTC and Washington allege that Riverside’s sales presentations left small businesses without a complete picture of what they would pay or how to leave.
- Sales representatives allegedly promised savings of 40% to 60%, while customers who switched typically paid more.
- Quote sheets allegedly omitted activation, batch, data-security noncompliance and inactive-processing fees.
- The complaint says a 26-page electronic contract included a $695 early termination fee and an initial three-year term with automatic renewal.
- Cascade equipment leases allegedly renewed automatically and ran one year longer than the processing agreements.
- Despite a “no-risk” guarantee, customers seeking to cancel allegedly faced deflections, unanswered callback requests or difficulty reaching the company.
From proposed terms to customer notice
The settlement is not yet a final court-approved judgment. The source material gives no date for court review or customer notices.
Agencies bring case
The FTC and Washington file a complaint and stipulated final order in federal court.
Judge reviews
The proposed order goes before the U.S. District Court for the Western District of Washington.
Requirements take effect
Defendants would have to meet the order’s disclosure, claims and cancellation requirements.
Notice and 60 days
Covered customers would be notified of the penalty-waiver period and how to rescind agreements.
What the proposed order says about accountability
The allegations concern the named defendants and do not establish that other payment processors use the same practices.
“Riverside and Cascade promised small businesses significant savings, but instead of saving money locked them into costly, multi-year contracts and made it very difficult to cancel.”— Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection
The FTC alleges violations of the FTC Act and Gramm-Leach-Bliley Act, including obtaining financial information through false or fraudulent statements. The Commission authorized the complaint and stipulated final order in a 2–0 vote. If defendants are found to have misrepresented their finances, the suspended $32,083,921 judgment would become due.
What small businesses should know
What would the settlement provide?
$600,000 in payment, a 60-day opportunity for covered customers to rescind processing agreements without a penalty, and rules for disclosures, savings claims and cancellation. Judicial approval is still required.
What did agencies allege?
They allege overstated savings, omitted fees, unclear processing and lease terms, and difficult cancellation despite a no-risk guarantee. These remain allegations unless established through the legal process.
Will defendants pay the full $32 million?
The proposed order sets a $32,083,921 judgment but suspends it after the $600,000 payment, based on asserted inability to pay. The full amount could become due if financial misrepresentation is found.
Proposed Cancellation Rights for Customers
If approved, the settlement would give covered Riverside customers a defined opportunity to exit agreements without the early termination charge or another penalty. The proposed order addresses allegations that customers received incomplete fee information and that contract terms appeared across sales materials, service contracts and equipment leases.
The proposed requirements also address how companies present recurring charges and cancellation terms before a customer signs up. The order would require disclosures about material terms and a simple cancellation method. The case concerns allegations against the named defendants; it does not establish that other payment processors use the same practices.
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Alleged Sales and Contract Terms
The FTC and Washington say Riverside used comparison quote sheets to pitch savings and did not include all fees that customers could incur. They allege that customers were then bound by processing agreements and separate equipment leases with renewal provisions that were not clearly explained by sales agents. The complaint describes the contracts as containing material terms that were not apparent in the sales presentation.
The complaint also challenges claims made in recruitment advertising for commission-based sales agents. The agencies say ads stated that agents could earn $75,000 to $95,000 a year, with top agents making “100k,” while the complaint puts average agent earnings at $3,787 per year. These are allegations in the government complaint, not findings after a trial.
The FTC alleges violations of the FTC Act and Gramm-Leach-Bliley Act, including obtaining financial information through false or fraudulent statements. The commission authorized staff to file the complaint and stipulated final order in a 2-0 vote. The case was filed in the U.S. District Court for the Western District of Washington.
““Riverside and Cascade promised small businesses significant savings, but instead of saving money locked them into costly, multi-year contracts and made it very difficult to cancel.””
— Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection
Court Approval and Claims Still Pending
The proposed order is not yet a final court-approved judgment. Under the FTC’s explanation, stipulated final orders have the force of law when approved and signed by the district judge. The available source material does not state whether the judge has approved the agreement or when a decision is expected.
The complaint records the FTC’s and Washington’s allegations; it does not establish them as proven facts. The source does not identify how many businesses would qualify for the 60-day rescission period, when individual customers would receive notices, or how the defendants’ inability-to-pay claim was assessed. The agencies say the full judgment would be due if the defendants are found to have lied about their finances.
Judge to Review Proposed Order
The next formal step is judicial review of the complaint and stipulated final order in the Western District of Washington. If the judge approves and signs it, the order’s requirements would take effect, including customer notices and the 60-day penalty-waiver period. The source material does not give a date for the court’s review or specify when notices would be sent.
Customers who believe they have a Riverside processing agreement can watch for direct notice describing whether and how they may rescind it. The proposed terms require defendants to notify customers about the waiver; the source does not provide a contact address, claim process or separate instructions for customers to use before that notice arrives.
Key Questions
What does the proposed Riverside settlement provide?
It calls for $600,000 in payment, a 60-day period for customers to rescind merchant-processing agreements without a termination penalty, and rules on disclosures, savings claims and cancellation. The order still requires a judge’s approval and signature.
What did the FTC and Washington allege?
The agencies allege Riverside overstated potential savings, omitted fees from sales comparisons, failed to clearly explain contract and equipment-lease terms, and made cancellation difficult despite offering a no-risk guarantee. These remain allegations unless established through the legal process.
Will the defendants pay the full $32 million judgment?
The proposed order sets a $32,083,921 judgment but suspends it after payment of $600,000 based on the defendants’ asserted inability to pay the full amount. The full amount would become due if they are found to have misrepresented their finances.
When can customers cancel without a penalty?
The proposed order requires Riverside to notify customers that it will waive the termination fee or other penalty for rescinding agreements during a 60-day period. The source material does not say when that period would begin; the order must first be approved and signed by the judge.
Source: ftc.gov
