Small businesses would receive a temporary opportunity to leave Riverside Payments' processing agreements without a termination penalty under a proposed settlement filed by the Federal Trade Commission and Washington state. Their November 2 complaint alleges that promised savings instead came with inadequately disclosed fees, automatic renewals and obstacles to cancellation.
The defendants are Riverside Payments Inc., Cascade Equipment Leasing LLC, Brandon Skinner and Jason Reese. The proposed order says they neither admit nor deny the allegations except as specified in the order, and admit the jurisdictional facts only for this action.
What the complaint alleges
The agencies allege that Riverside's quotes omitted charges including activation fees, batch fees and charges for supposed noncompliance with data-security standards or inactive processing. Businesses often paid more than they had paid their previous provider, the complaint alleges.
According to the complaint, Riverside's processing agreements had an initial three-year term and a $695 early termination fee, while Cascade's equipment leases ran for four years. Both included automatic renewal. The agencies allege that sales pitches did not adequately disclose those terms and that businesses encountered unanswered cancellation requests while charges continued.
These are allegations in a civil complaint, not findings that the defendants violated the law.
What the proposed order would do
The proposed order would require customer notices within 30 days after its entry, describing a 60-day opportunity to rescind merchant-processing agreements without an early termination fee or penalty. Its definition of rescission expressly excludes equipment leases. It would also require simple ways to cancel automatic-renewal features.
The proposed monetary judgment is $32,083,921. The defendants would fund $600,000 in merchant redress, with the remainder suspended subject to conditions. Under the proposed order, the suspension would be lifted for failure to meet the funding and payment requirements, which include payment to the FTC if merchant payments cannot be made. It would also be lifted, on an FTC or Washington motion, if the court finds specified material misstatements or omissions in the defendants' financial disclosures. The proposed fund would be distributed according to processing volume under an FTC-approved plan.
What remains unconfirmed
The FTC says stipulated orders have legal force when approved and signed by the district judge. The posted proposed order does not establish that approval has occurred, that a customer's cancellation period has begun or that any refund has been paid. It supplies no fixed calendar deadline for customers to use today.