SEATTLE — Investors in WaterStation Technology, an Everett-based water vending machine company, have filed a lawsuit against Port Angeles-based First Fed Bank, accusing it of issuing over $7.3 million in high-risk loans without disclosing its business relationship with the company, The Seattle Times reported.
The lawsuit, filed in King County Superior Court, claims First Fed had already loaned $28 million to WaterStation before extending additional funds to investors, many of whom used personal assets, including homes, as collateral.
WaterStation, founded in 2013 by Ryan Wear, promised investors annual returns of 12% to 20% by installing water-bottle filling stations at grocery stores. However, investors say the company stopped payments in 2022 and that 90% of its reported 17,000 machines don’t exist.
The lawsuit alleges First Fed failed to disclose these risks and had a referral agreement with WaterStation that facilitated easy loans for investors, without adequate interviews or warnings. After payments ceased, the bank allegedly pursued investors’ personal assets.
First Fed has not responded to requests for comment on the suit.