State and federal officials have reached a settlement with a Washington state-based payment processor that will provide $600,000 for financial relief to 300 of its customers in the state.

Small businesses will be able to cancel their contracts with Riverside Payments Inc. of Vancouver without a termination penalty and be eligible for compensation based on each business’s processing volume from the past six months, according to a release. 

The settlement with state justice officials and the Federal Trade Commission resolves allegations Riverside, affiliate Cascade Equipment Leasing and its owners deceived customers about cost savings through its services and made it difficult to cancel contracts.

“Riverside and Cascade failed to serve their small business customers in an honest, transparent way in violation of Washington law,” Attorney General Nick Brown said. “I’m gratified that we can now deliver relief to impacted Washington businesses and get accountability for these deceptive practices.”

Riverside is a credit card payment processor that provides services across the country. The FTC and state justice officials allege Riverside told small businesses they could in some cases save nearly 60% by contracting with Riverside. But small businesses that switched to Riverside typically ended up paying more than they did with their previous provider, the complaint alleges.

Riverside also failed to disclose various added fees and buried key information including a $695 early termination fee and the cost of leasing payment processing machines from Cascade. Riverside then made it extremely difficult for businesses to cancel their services.

The FTC alleged those practices and others violated the FTC Act and the Gramm-Leach-Bliley Act by obtaining consumers’ financial information through false or fraudulent statements. Washington alleged defendants violated the Washington State Consumer Protection Act.

The proposed order imposes a $32 million judgment against Riverside, Cascade, and the company owners, which will be suspended after payment of $600,000 due to their inability to pay the full amount. The full amount will be due if they are found to have misrepresented their finances.