The settlement, which requires approval from Chief U.S. Magistrate Judge Theresa Fricke in the Western District of Washington, would bar the companies from making misleading claims about processing fees and savings. It also requires them to notify current customers about the lawsuit and give those businesses about two months to exit their processing contracts.

An estimated 300 businesses in Washington, along with others in Oregon and across the country, could be eligible for a share of the judgment if the settlement is approved.

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

Riverside Payments strongly disagrees with the allegations, a company spokesperson said in an emailed statement.

"Our decision to settle will allow us to resolve this matter and focus on helping our clients with their card-processing needs," the statement said.

According to the FTC and the attorney general's office, Riverside and Cascade told businesses they could save nearly 60% compared to their previous processing company if they signed up. Instead, many businesses paid more and were pushed into expensive equipment leases that were difficult to escape.

The companies 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, the attorney general's office said.

State and federal investigators determined that Riverside Payments likely owes $32 million to its clients. But because of the company's reported finances, the proposed settlement is for $600,000. If Riverside's leaders are found to have misrepresented the company's finances, the full $32 million would become due under the settlement terms.

"When they recruit new customers to sign up, they can no longer make false claims about the services they offer, their rates or their savings," FTC attorney Ben Davidson told OPB. "They also have to tell their customers about our lawsuit and give their customers a chance to exit their processing arrangement if the customers aren't happy with their business relationship with Riverside."

The settlement does not cover equipment leased by businesses, which has been the subject of hundreds of complaints filed with the Better Business Bureau. Many businesses say they were told they were leasing a terminal for a small monthly fee, only to discover the total cost reached thousands of dollars over a typical four-year lease. Basic card terminals often cost just a few hundred dollars to buy outright.

When clients tried to cancel their equipment leases—sometimes for equipment they say they never ordered—Riverside told them the lease was through a third party and could not be canceled. In many cases, that third party was Cascade Equipment Leasing, which shares the same executives and address as Riverside Payments, according to state records.

Brandon Skinner and Jason Reese are listed as executives of both companies. Skinner is also connected to two other companies, Cascade Management Group and Cascade Tech Systems.

Roughly 250 complaints have been filed against Riverside Payments with the Better Business Bureau over the past three years from businesses across the country. A Texas restaurant owner wrote that a sales representative promised lower rates and financial savings but "completely concealed the binding long-term commitments, including a rigid 48-month equipment lease/subscription of $291 per month and steep cancellation fees." The owner said they were never clearly informed they were locking themselves into a multi-year obligation totaling nearly $14,000 for equipment.

Other complaints describe aggressive sales tactics that rushed business owners into signing contracts on an iPad with terms that differed from what was presented on paper. When businesses tried to cancel, many could not reach anyone at the company. The few who did were told they would have to pay a large termination fee to cancel the processing contract—and even then, they remained on the hook for the equipment lease.

The proposed settlement could be approved any day. The judge could also deny it or request more information.