Payments firm settles FTC fees case

This settlement serves as a major warning for any retailer or operator regarding the fine print in their payment processing and financing contracts. Riverside Payments has agreed to pay $600,000 to settle FTC allegations that they misled small businesses about processing rates and hidden fees. The core of the issue was 'bait-and-switch' tactics. The company allegedly promised low flat rates but then added significant monthly fees and made it nearly impossible for merchants to cancel their contracts without paying thousands in penalties. For your business, this highlights the danger of signing equipment leases or processing agreements without a clear exit strategy. The FTC found that even when merchants were unhappy, they were often trapped by non-cancellable three-year equipment leases that were separate from the processing service. This is a common trap in the merchant services industry. You should audit your current merchant statements to ensure the effective rate matches what you were promised. If a salesperson tells you they can 'guarantee' a specific savings amount, ask for that guarantee in writing within the main contract body. Moving forward, the FTC is signaling that it will hold processors accountable for deceptive sales pitches, but the immediate responsibility remains with the business owner to vet the hardware and software terms independently.

Source: Payments Dive

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