FTC sues Toast over hidden fees and support claims
The regulator says the restaurant-technology company advertised a free point-of-sale plan while burying fees, add-ons and a hard exit behind it.
The Federal Trade Commission sued Toast Inc. on October 29, alleging the restaurant technology company hid fees, unauthorized subscription charges and cancellation traps inside a point-of-sale plan it advertises as free.
The FTC filed the complaint in the US District Court for the Northern District of California, joined by California's Los Angeles County and San Francisco counsel and by attorneys general in Colorado, Florida and five other states. The Commission voted 2-0 to authorize the case.
Toast markets a "Pay-as-you-Go" plan at $0 a month for hardware and software, pitched as a low-risk entry for small restaurants. The complaint says the real cost shows up elsewhere: higher per-transaction fees, and hardware that must be returned or paid for in full if a restaurant doesn't start taking payments within 120 days — timing that echoes the rival kiosk Square launched this month, a sign of how fee-sensitive the sector has become.
These practices are illegal, and the FTC will continue to take aggressive action.
What the complaint alleges
Restaurants that close temporarily are charged $85 a month regardless, the filing says, and early termination costs $150 per remaining contract month. Operators were also allegedly enrolled in add-ons such as timekeeping and payroll without consent, pushing average subscriptions to roughly $900 a month — on top of a $0.99 fee added to online orders between 2021 and 2023 that Toast kept rather than passing to restaurants.
Cancelling is its own obstacle course, the complaint says: a 30-day written notice not clearly disclosed at sign-up, calls that turn into retention pitches, and one owner charged $5,318.87 in termination fees after four years.
Round-the-clock support that isn't
Toast advertises "24/7/365" support on its website and enrollment materials. The complaint cites a business owner who called on a Saturday and was told no one was available — the kind of gap regulators say leaves restaurants stuck with fees they can't resolve.
"These practices are illegal, and the FTC will continue to take aggressive action," said Christopher Mufarrige, director of the agency's Bureau of Consumer Protection, who accused Toast of "hidden fees, unauthorized charges and subscription traps." Toast disputes this: "We strongly disagree with the allegations in the lawsuit filed by the FTC and will vigorously defend the Company," it said in a statement.
The complaint alleges violations of the FTC Act and the Restore Online Shoppers' Confidence Act, seeking an injunction, refunds and civil penalties rather than a settlement figure — scrutiny that lands as operators weigh UK hospitality's thin Autumn Budget relief against their own rising costs.
