FTC, Washington Take Action Against Payment Processor for Deceiving Small Businesses About Costs and Cancellation Terms
Riverside Payments falsely promised to save small businesses money on payment-processing services but failed to disclose fees and auto-renewing contracts, complaint alleges
WASHINGTON, D.C. / CRWE PRESS RELEASE / November 2, 2026 - Payment processor Riverside Payments Inc., its affiliate Cascade Equipment Leasing LLC and their operators will pay $600,000 to resolve Federal Trade Commission and Washington state allegations that the firms deceived small businesses by falsely promising to save them money on payment processing services and making it nearly impossible to cancel despite offering “risk-free” cancellation.
Small businesses also will be able to rescind processing agreements without a termination penalty under the proposed order settling the FTC and Washington’s allegations.
In their complaint, the FTC and the State of Washington allege that Washington-based Riverside, Cascade and their owners and executives, Brandon Skinner and Jason Reese, falsely promised small businesses that they would save money on payment-processing services, while failing to clearly inform the businesses that they were being enrolled in automatically renewing contracts for payment-processing services and to lease equipment.
“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,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection. “The FTC will hold accountable companies that deceive small businesses, whose hard work powers our economy.”
The FTC and Washington allege that Riverside’s sales pitches included a quote sheet that compared the costs prospective clients paid their existing payment processor with the amount they would save if they used Riverside’s services instead. The complaint alleges that Riverside at times claimed that small businesses could save 40% to 60% by switching to Riverside. In reality, the FTC and Washington allege, small businesses who switched to Riverside typically ended up paying more than they did with their previous provider.
The quote sheet Riverside provided to potential clients failed to include various fees, such as activation fees, batch fees and fees for supposed non-compliance with data security standards or inactive processing, according to the complaint. In addition, Riverside’s 26-page electronic contract buried key information not clearly disclosed by sales agents, according to the complaint. This included information about automatic renewals for processing services after the initial three-year term; a $695 early termination fee; and the cost of leasing payment processing machines from Cascade, which locked customers into an auto-renewing contract that lasted one year longer than the processing contract.
The FTC and Washington allege that Riverside made it extremely difficult for small businesses to cancel it services despite its promised “no-risk” guarantee when customers signed up. The company not only falsely promised businesses they could cancel anytime without penalty but also falsely claimed that it would switch unsatisfied businesses back to their original payment processor and pay them $500 for their “time and hassle.”
The complaint alleges that small businesses who attempted to cancel typically did not hear back from Riverside and were often stuck in a loop of fruitless phone calls and deflection.
Even businesses that were willing to pay Riverside’s improperly disclosed $695 termination fee, which was a surprise to many, were told there was no direct line to call to cancel Riverside’s services and they must wait to receive a call back. The complaint alleges that such callbacks often never came.
In addition, the FTC and Washington allege that Riverside has made false and unsubstantiated claims about how much money its sales agents, who work on commission, will earn. Riverside’s ads have claimed sales agents could earn between $75,000 and $95,000 a year, and that top sales agents can make “100k.” In reality, agents made, on average, just $3,787 per year, according to the complaint.
The FTC alleges that Riverside’s practices violated the FTC Act and the Gramm-Leach-Bliley Act by obtaining consumers’ financial information by using false or fraudulent statements.
The proposed order resolving the FTC’s and Washington’s allegations imposes a $32,083,921 judgment against Riverside, Skinner, Reese and Cascade, which will be suspended after payment of $600,000 due to their inability to pay the full amount. The full amount will be due if they are found to have lied about their finances.
The order also requires the defendants to notify their customers that Riverside will, for a 60-day period, waive the early termination fee or any penalty for rescinding the merchant-processing agreements. The defendants also will be prohibited from: misrepresenting the costs, savings, cancellation conditions or any other material fact about any good or service they sell; making unsubstantiated claims about the amount of savings customers will realize; making unsubstantiated earnings claims; and misrepresenting any aspect of a negative option feature related to a good or service they sell.
The order also requires the defendants to clearly and conspicuously disclose to consumers, prior to obtaining their billing information, all material terms of the transaction, to obtain consumers’ express informed consent to use a negative option plan to bill consumers and to provide consumers with a simple way to cancel a negative option plan.
The Commission vote authorizing the staff to file the complaint and stipulated final order was 2-0. The FTC and Washington filed the complaint and final order in the U.S. District Court for the Western District of Washington.
NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. Stipulated final orders have the force of law when approved and signed by the District Court judge.
The Federal Trade Commission works to promote competition and protect and educate consumers. The FTC will never demand money, make threats, tell you to transfer money, or promise you a prize. Learn more about consumer topics at consumer.ftc.gov, or report fraud, scams, and bad business practices at ReportFraud.ftc.gov. Follow the FTC on social media, read consumer alerts and the business blog, and sign up to get the latest FTC news and alerts.
Contact Information
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Juliana Gruenwald Henderson
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202-326-2924
Source: Federal Trade Commission
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