A payment processor and its equipment-leasing affiliate have agreed to pay $600,000 to resolve allegations from the Federal Trade Commission and the state of Washington that they misled small businesses about the cost of card processing and then made it very hard for those businesses to leave. The proposed settlement, announced on November 2, 2026, covers Riverside Payments Inc., its affiliate Cascade Equipment Leasing LLC, and the two men identified as the companies’ owners and operators, Brandon Skinner and Jason Reese. It also opens a limited window in which affected merchants can walk away from their processing agreements without paying an early termination fee.
The case matters well beyond one company because it describes a pattern that many small firms will recognise: a sales pitch built around large promised savings, a long contract whose most important terms were not obvious at the point of sale, and a cancellation process that, according to the complaint, turned into repeated calls, delays and unanswered requests. Regulators did not ask a court to decide whether every allegation was proved. Instead, a complaint and a proposed order were filed in the United States District Court for the Western District of Washington, which is the usual shape of a negotiated settlement that still needs a judge’s signature before it has the force of law.
For the businesses involved, the practical point is the exit route. Under the proposed order, the companies must tell customers that, for sixty days, they will waive the early termination fee and any other penalty for rescinding a merchant processing agreement. More than three hundred small businesses in Washington alone are described as eligible for compensation tied to their processing volume over the previous six months, while Riverside, which is based in Vancouver, Washington, sold its services to merchants across the country. The wider lesson, in the regulators’ telling, is that a cheap headline rate means little if the contract behind it carries fees, renewals and lease obligations that were never clearly explained.
What the FTC Riverside Payments settlement requires
The headline numbers in the proposed order need to be read together, because on their own they look contradictory. The order imposes a judgment of $32,083,921 against Riverside, Cascade, Skinner and Reese, but that judgment will be suspended once the defendants pay $600,000, because of what the regulators describe as an inability to pay the full amount. The full judgment could become due again if the defendants are found to have misrepresented their financial position, so the suspended figure is not a discount that can be taken for granted. It is a conditional arrangement, and the condition is honesty about what the companies can afford.
Beyond the money, the proposed order would bar the companies from misrepresenting the costs, savings, cancellation conditions or any other material fact about a good or service they sell. It would also bar unsubstantiated claims about customer savings and unsubstantiated earnings claims, and it would bar misrepresentations about any negative-option feature, which is the term for an arrangement in which a seller treats a customer’s silence as agreement to keep paying or to stay enrolled. Before collecting billing information in future, the companies would have to disclose all material terms clearly and conspicuously, obtain a customer’s express informed consent for a negative-option billing plan, and provide a simple way to cancel such a plan. The Federal Trade Commission’s vote authorising staff to file the complaint and the proposed order was 2-0.
The order’s status is an important caveat for any merchant reading about it. The Federal Trade Commission has said the order will have the force of law once it is approved and signed by the judge. Until that happens, the settlement is proposed rather than final, and businesses that want to use the penalty-free window should watch for the companies’ customer notice and for confirmation that the court has signed the order, rather than assuming every detail is already in effect. The complaint itself contains allegations, not findings by a court, and the companies’ position on the merits has not been tested at a trial.
The savings promises at the centre of the complaint
At the heart of the complaint is the sales pitch. The Federal Trade Commission and Washington allege that Riverside promised small businesses they could save between forty and sixty percent by switching payment processors, and in some cases claimed savings of nearly sixty percent. According to the complaint, businesses that switched typically ended up paying more than they had paid their previous provider, not less. That gap between promise and outcome is the central allegation, and it is why the regulators frame the case as deception rather than as a simple disagreement about price.
The complaint also alleges that the sales quotes left out fees that then appeared in practice. Among the charges said to have been omitted from quotes were activation fees, batch fees and charges connected to data security compliance or inactive processing. A merchant comparing two processors on the basis of a quoted rate would therefore have been comparing like with like, because part of the real cost was not in the quote at all. The regulators argue that this kind of omission matters most for small businesses, which often lack a specialist buyer to interrogate a processing contract line by line and which may take a promised saving at face value when margins are already tight.
The Federal Trade Commission’s consumer protection chief put the point in blunt terms in the agency’s announcement, saying the companies had promised significant savings but instead locked businesses into costly multi-year contracts and made cancellation very difficult, and that the agency would hold accountable companies that deceive small businesses. That statement is the regulator’s characterisation of the case, not a court finding, but it explains why the settlement pairs a payment with forward-looking bans on savings claims that cannot be substantiated. A future claim of a percentage saving, on this model, would need evidence behind it before it could be made.
Contracts, fees and the cancellation loop
The contract terms alleged in the complaint show how a processing deal could become much longer and more expensive than a merchant expected. The complaint says key terms were buried in a twenty-six-page electronic agreement, including automatic renewal of payment processing services after an initial three-year contract, a $695 early termination fee, and equipment leases through Cascade that extended a year beyond the processing agreement itself. A business that thought it was signing up for a processing service could therefore find itself tied to a lease as well, and tied for longer than the processing term it had in mind.
Cancellation is where the complaint becomes most detailed, and most sympathetic to the merchants. Riverside is alleged to have advertised a “no-risk” cancellation guarantee, promising customers they could cancel at any time without penalty, switch back to their previous processor and receive $500 for their time and trouble. Businesses that tried to leave, the complaint alleges, instead faced a complicated loop of deflection and fruitless phone calls, with repeated calls and delays and, in some cases, promised callbacks that never arrived. Washington’s attorney general described the same experience as extreme hurdles to cancelling, and said the companies had failed to serve their small business customers in an honest and transparent way, in violation of Washington law.
The legal labels attached to those allegations are also worth setting out plainly. The Federal Trade Commission alleged the practices violated the FTC Act and the Gramm-Leach-Bliley Act, on the basis that consumers’ financial information was obtained through false or fraudulent statements. Washington alleged a violation of the state’s Consumer Protection Act. Those are allegations in a complaint, and they identify the statutes the regulators say were breached, but they are not the same as a judicial ruling that the statutes were in fact breached. The settlement resolves the complaint without such a ruling, which is common in negotiated consumer protection cases and is one reason the forward-looking conduct bans matter as much as the payment.
The sales-agent earnings claims
A second strand of the complaint concerns people on the other side of the sales call: the commission-based sales agents recruited to sell Riverside’s services. The complaint alleges that Riverside advertised that agents could earn between $75,000 and $95,000 a year, and that top sales agents could make $100,000, described in the advertising as “100k”. According to the complaint, agents in fact earned an average of about $3,787 a year, a figure Washington’s announcement rounds to about $3,800. The gap between the advertised range and the reported average is so large that the regulators treat the earnings claims as false and unsubstantiated, rather than as optimistic guesswork.
That strand matters for two reasons. First, it suggests that the sales force itself may have been recruited on a misleading basis, which in turn helps explain how aggressive savings pitches reached so many merchants. An agent who believes, or who has been told, that high earnings are normal may sell harder and check less. Second, it broadens the case beyond merchant pricing into recruitment advertising, which is why the proposed order’s ban on unsubstantiated earnings claims sits alongside its bans on savings and cancellation misrepresentations. A company that cannot substantiate an earnings figure, on this approach, should not advertise it at all.
It is worth keeping the status of these figures clear. The earnings numbers are drawn from the complaint’s account of what agents earned on average, and the advertised figures are drawn from the complaint’s account of Riverside’s advertising. Neither figure has been tested in a contested hearing, and the settlement does not convert them into court findings. What can be said without qualification is that the regulators considered the gap serious enough to include it in the complaint and in the proposed bans, and that any future earnings claim by the companies would need substantiation before it was published.
Why the $600,000 payment sits beside a $32 million judgment
Readers often ask why a settlement can announce two very different dollar figures at once, and the Riverside order is a clear example of how that structure works. The larger figure, $32,083,921, is the judgment the order imposes. The smaller figure, $600,000, is the amount whose payment suspends that judgment, on the stated ground that the defendants cannot pay the full amount. Suspension is therefore not forgiveness in the ordinary sense. It is a payment plan with a threat attached: misrepresent your finances, and the full amount can come back into play.
The structure also reflects a practical judgment about recovery. A judgment for the full amount that cannot be collected helps no merchant, while a smaller payment that is actually made can fund compensation and, just as importantly, can be paired with conduct rules that change how the business operates. In this case, compensation for eligible Washington businesses is to be based on processing volume over the past six months, which ties relief to how much business a merchant actually did through Riverside rather than to a flat sum. Merchants outside Washington who used Riverside’s services nationally will need to look to the companies’ customer notice and to the Federal Trade Commission’s information about the settlement to see what, if anything, applies to them, because the state announcement’s eligibility figure is specifically about Washington businesses.
The sixty-day penalty-free window deserves the same careful reading. It is a defined period, not an open-ended right to cancel at any time without consequence, and the order requires the companies to notify customers that the waiver applies during that period. A merchant that wants to use it should therefore act within the window once the notice arrives and the order is signed, keep a record of the cancellation request, and check whether any equipment lease is covered by the same waiver or needs separate handling, since the complaint treats the processing agreement and the Cascade equipment lease as distinct obligations. That distinction, buried in the original contract, is exactly the kind of detail that caused trouble in the first place.
What small businesses should check next
For any small business currently using a payment processor, whether Riverside or another firm, the case offers a practical checklist that does not depend on the outcome of this particular settlement. First, ask for the all-in cost, including activation, batch, compliance and inactivity charges, and compare that figure with the previous provider’s all-in cost, not with a headline percentage saving. Second, read the renewal clause and the lease clause separately, and note the end dates of each, because a processing term and an equipment term that end a year apart can trap a business that thinks it is free. Third, ask in writing what cancellation requires, what fee applies, and how long the process takes, and keep that answer with the contract.
Fourth, treat any “no-risk” or “cancel any time” promise as a claim to be verified against the written agreement, not as a substitute for it. If the written agreement contains a $695 termination fee or an automatic renewal, then the sales promise and the contract are in tension, and the contract is what a business will usually enforce. Fifth, for businesses that recruit sales agents or independent contractors, check that any earnings figure in recruitment material can be substantiated with actual average earnings, not only with the earnings of a top performer. The Riverside complaint treats the difference between a top performer’s earnings and an average agent’s earnings as central, not as a footnote.
Finally, the case is a reminder that consumer protection enforcement in the United States often arrives as a joint federal and state action, with the federal regulator and a state attorney general filing together in a federal district court. That combination gives a settlement national reach through the federal court order while also delivering state-level relief, as Washington’s compensation eligibility shows. For merchants, the useful next step is unglamorous but concrete: find the customer notice, confirm the court has signed the order, note the sixty-day window, and act within it if leaving is the right commercial decision. A settlement that promises an exit is only useful if the businesses it is meant to help know about it in time to use it.
Sources
USN reviewed reporting from multiple outlets for this story. Read more from Federal Trade Commission, Washington State Attorney General and CFO Dive.