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FTC, states sue Toast over alleged hidden fees, subscription traps

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October 29, 2026

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The Federal Trade Commission and a coalition of state and local officials have sued restaurant technology provider Toast, alleging the company charged restaurants hidden and unauthorized fees, made it difficult to cancel subscriptions and failed to deliver on promises of 24/7 customer support, the FTC has announced in a news release.

As of press time, Toast had not returned request for comment.

The agencies allege violations of the FTC Act, the Restore Online Shoppers' Confidence Act and related state laws. The FTC said its commission authorized the complaint by a 2-0 vote and the allegations have not been proven in court. The FTC noted that filing a complaint reflects the agency's belief that violations may have occurred and the case will be decided by the court.

The lawsuit, filed in the U.S. District Court for the Northern District of California, includes officials from California, Colorado, Florida, Illinois, Iowa, Nebraska, Oklahoma and Utah.

According to the complaint, Toast subscriptions average about $900 per month, depending on the number of terminals and add-on services. The agencies allege some restaurant customers were enrolled in and charged for add-ons, including payroll and employee timekeeping services, without their consent.

The complaint also challenges Toast's "Pay-as-you-Go" plan, which advertises hardware and software for $0 per month in exchange for higher payment-processing fees. Regulators allege the company failed to clearly disclose other costs, including a $150 monthly early termination fee for each remaining month of a contract and requirements to return hardware or pay its full retail price if payment processing did not begin within 120 days.

Toast also allegedly charged restaurant customers a 99-cent fee on certain online orders over $10 between September 2021 and late July 2023. The fee went to Toast rather than the restaurants, according to the complaint.

The agencies further allege that Toast's cancellation process required written notice, coordination among multiple company teams and, in some cases, unexpected termination fees. The complaint cites one customer who allegedly faced a $5,318.87 early termination fee after canceling an account following four years.

The lawsuit also raises concerns about Toast Capital loans. According to the complaint, customers who canceled their subscriptions or switched providers could be treated as having defaulted on their loans, triggering immediate repayment of outstanding balances.

Regulators said Toast's customer-support promises were another area of concern. Although the company advertises "24/7/365 support," the complaint alleges customers struggled to reach staff who could resolve problems. One business owner reportedly lost thousands of dollars in credit card transactions after being told the team able to help was unavailable on a weekend.

"Toast failed to honor a number of its promises and instead imposed hidden fees, unauthorized charges and subscription traps that drained the hard-earned profits of businesses just trying to serve their customers," Christopher Mufarrige, director of the FTC's Bureau of Consumer Protection, said in the release.