FTC, Eight States Sue Toast Inc. Over Hidden Fees and Deceptive Practices
Federal and state regulators allege the restaurant tech firm misled customers on pricing, support, and cancellation terms.
The Federal Trade Commission, joined by California prosecutors and the attorneys general of seven additional states, filed suit Wednesday against Toast Inc., the restaurant software and financial technology company, alleging a pattern of deceptive business practices targeting restaurant operators.
According to the complaint, Toast allegedly concealed fees from customers, imposed unauthorized charges, and misrepresented the nature of its subscription and cancellation policies. Regulators also contend the company falsely advertised around-the-clock customer support under a "24/7/365" claim that did not reflect actual service levels.
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The coalition of plaintiffs spans the People of the State of California — represented by the Los Angeles County Counsel and San Francisco City Attorney — alongside the attorneys general of Colorado, Florida, Illinois, Iowa, Nebraska, Oklahoma, and Utah. The breadth of the multistate action signals coordinated enforcement pressure on fintech firms operating in the restaurant and hospitality sector.
The allegations against Toast fit a broader regulatory pattern in which the FTC has escalated scrutiny of so-called "junk fees" embedded in software-as-a-service and payment processing contracts, particularly those marketed to small and mid-sized businesses with limited legal resources to vet complex agreements. Toast has not yet issued a public response to the lawsuit, according to available information at the time of this report.
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