Riverside Payments and its affiliates agreed to pay $600,000 to resolve allegations they misled small businesses about processing costs.

The FTC and Washington alleged in their complaint that Riverside promised businesses they could save 40% to 60% by switching payment processors. In reality, businesses that switched typically ended up paying more than they had with their previous providers, according to the complaint, which was filed Monday in the U.S. District Court for the Western District of Washington, along with a proposed order resolving the charges.

The companies allegedly failed to disclose several fees in sales quotes, including activation fees, batch fees and charges related to data security compliance or inactive processing, the government alleged. Riverside also allegedly buried important contract terms in a 26-page electronic agreement.

Those terms included automatic renewal of payment-processing services after an initial three-year contract, a $695 early termination fee and equipment leases through Cascade that extended one year beyond the processing agreement, according to the complaint.

The FTC and Washington also allege Riverside 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 seeking to leave instead allegedly faced repeated phone calls and delays, with some never receiving promised callbacks.

The complaint also challenges Riverside's earnings claims to prospective sales agents. The company advertised that agents could earn $75,000 to $95,000 annually, with top performers making $100,000. In reality, agents earned an average of $3,787 per year, according to the complaint.

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