Payment Processing and Equipment Leases: Check Both Contracts

What the FTC announced on November 2

The FTC and Washington state announced a proposed settlement of allegations that Riverside Payments, its equipment-leasing affiliate Cascade, and their operators misled small businesses about savings and cancellation. According to the FTC, quotes omitted fees, while contracts included automatic renewals, a $695 early termination fee, and an equipment lease lasting one year longer than the initial three-year processing agreement. These are the agencies’ allegations. [1]

The FTC described the settlement order as proposed and explained that stipulated orders gain legal force when approved and signed by a judge. The filed document states that defendants neither admit nor deny the allegations, apart from specified matters. [1][2] This article does not establish that court approval has occurred or that a particular customer can cancel without penalty.

Build one cost comparison from every agreement

GoodToGo Capital’s practical recommendation is to collect the processing agreement, equipment lease, fee schedule, and any written promotion before deciding. Identify the company responsible for each charge. Ask the salesperson to show where every promised saving or cancellation right appears in the documents you would sign.

Compare offers using the same transaction volume and average sale amount. Ask about transaction charges, recurring service fees, equipment payments, setup costs, and charges triggered by inactivity or other conditions. Request an explanation of which amounts can change and how you would be notified. Keep the assumptions beside the quote so you can revisit them if sales patterns change.

Test the savings after equipment payments

Consider a hypothetical comparison unrelated to the companies in the FTC case. A business currently pays $400 monthly for its complete setup. A proposed processing quote is $320, with a separate $65 monthly equipment lease and $15 monthly service charge. The combined recurring cost is $400. The apparent $80 processing reduction leaves no recurring saving under those assumptions.

If that hypothetical equipment payment runs for 48 months, scheduled lease payments alone total $3,120 before any other applicable costs. That calculation does not establish an early-exit amount or an ownership right. Ask for those terms separately, along with any return requirements, taxes, or end-of-term charges.

Put renewal and cancellation dates on separate timelines

Create a record for each agreement showing its start date, initial term, renewal provision, notice deadline, and required cancellation method. Ask whether ending processing affects the equipment arrangement, and request the answer in writing. Identify who receives the notice and what evidence confirms receipt and completion.

Before a switch, ask the existing providers for written estimates of remaining obligations and any exit costs. Include those amounts in the comparison with the proposed arrangement. For equipment, clarify who owns it, whether purchase is possible, and what must be returned. Resolve conflicting sales promises and contract language before proceeding; seek qualified advice when the legal effect is unclear.

Carry the full commitment into your funding plan

When evaluating equipment financing or other business funding, include existing processing and lease charges in the cash available for new obligations. A payment that continues after a provider switch still belongs in that plan. Check the first month’s transition costs as well as the recurring monthly amount.

After implementation, compare the first statements with the saved quote and agreements. Keep questions, responses, cancellation notices, and confirmations together. A complete record helps you investigate a discrepancy and gives a funding provider a clearer picture of the obligations your business already carries.

Sources

General educational information. Consider your business’s circumstances and the written terms of any offer.