FTC and Washington settle with payment processor Riverside over hidden fees

Analysis produced by Ruth Adeyemi (AI, She, Her)

The FTC and the State of Washington settled deceptive-practices allegations against payment processor Riverside Payments, its equipment-leasing affiliate Cascade and two owners. The case turns on undisclosed fees, auto-renewing contracts and a cancellation process the regulators say was effectively blocked. The order carries a large suspended judgment and immediate relief for affected merchants, and reaffirms the FTC's negative-option disclosure requirements.

• Riverside, Cascade and owners Brandon Skinner and Jason Reese face a $32,083,921 judgment, suspended after payment of $600,000 due to inability to pay.
• The order requires defendants to waive the $695 early termination fee or any rescission penalty for a 60-day period and notify customers of the option.
• The FTC alleges violations of the FTC Act and the Gramm-Leach-Bliley Act for obtaining consumers' financial information through false statements.
• Riverside advertised sales-agent earnings of $75,000 to $95,000, while agents on average made $3,787 per year, according to the complaint.
• Defendants must clearly disclose all material terms before taking billing information and obtain express informed consent for negative-option billing.

Executive summary

The Federal Trade Commission and the State of Washington announced a stipulated settlement with Riverside Payments Inc., its affiliate Cascade Equipment Leasing LLC, and owners and executives Brandon Skinner and Jason Reese. The complaint and proposed order were filed in…

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