A Vancouver, Washington-based credit card processor accused of luring small businesses with promises of big savings, then hitting them with hidden fees and near-impossible cancellation terms, has agreed to a proposed $600,000 settlement with federal and state officials. The deal, if approved by a judge, would send that money to an estimated 300 Washington businesses that officials say were misled by Riverside Payments and its affiliated equipment-leasing company.
The Federal Trade Commission reached the proposed settlement with Riverside Payments and the state of Washington, according to Oregon Public Broadcasting. Officials allege Riverside misled customers through hidden fees, expensive equipment leases and contracts that were extremely difficult to cancel. The proposed order also extends to Cascade Equipment Leasing, which OPB reports is operated by Riverside executives Brandon Skinner and Jason Reese, and the two companies are registered at the same Washington address and share the same owners.
Officials say Riverside and Cascade told prospective clients they could save nearly 60% compared to their previous processor, per the FTC and Washington Attorney General Nick Brown’s office, as cited by OPB. In practice, businesses that switched to Riverside typically ended up paying more than they had before, not less, even though payment processors typically charge around 2% of processed sales, per OPB’s reporting.
Fees Allegedly Buried in Fine Print
Payments Dive reports that the underlying complaint accused Riverside of failing to disclose several fees in its sales quotes, including activation fees, batch fees, data-security-compliance fees and inactive-processing fees. The complaint also alleged that Riverside’s contracts automatically renewed after an initial three-year term and carried a $695 early termination fee that was not properly disclosed, a figure the Washington Attorney General’s office separately flagged…