FTC Sues Toast Over Hidden Fees and 24/7 Support Claims

The Federal Trade Commission and seven state attorneys general sued Toast on Thursday, alleging the restaurant technology provider hides fees, charges for unrequested services, and falsely advertises around-the-clock support. The complaint, filed in federal court in Northern California, seeks an injunction, monetary damages, and civil penalties.

The stakes are large. Boston-based Toast serves nearly 200,000 businesses with point-of-sale systems, ordering devices, payments, online ordering, and marketing tools. The company generated more than $6 billion in revenue in 2025. More than 80% of that revenue comes from financial services such as payment processing and business loans.

The states joining the FTC are Colorado, Florida, Illinois, Iowa, Nebraska, Oklahoma, Utah, and California, whose people are named as plaintiffs.

What does the complaint allege?

The core of the case concerns pricing disclosure. Toast markets a $0-per-month "Pay-as-you-Go" subscription toward one- or two-unit restaurants, offering free hardware and software but a higher processing fee to cover those costs. The lawsuit argues the $0 price is contradicted by fine print that restaurants could easily miss. The zero-dollar rate applies to only one POS terminal, even though the product is advertised for restaurants needing one to two terminals. That limit appears in small type at the bottom of the webpage, according to the complaint.

The suit also revives the 99-cent online ordering fee Toast charged consumers between September 2021 and June 2023. The lawsuit says Toast never disclosed this fee to restaurants in their contracts. Restaurants rebelled against the charge in the summer of 2023, and Toast removed it. The company has not reimbursed customers, the complaint states.

Add-on enrollments form a third allegation. Restaurants "frequently complain" that after buying a subscription, Toast enrolls them in services they did not sign up for, sometimes even after they ask to cancel those services.

How hard is it to leave Toast?

Cancellation is a multi-step process requiring the involvement of multiple Toast departments, the lawsuit says. Support is no simpler. Despite promises across its website of "24/7 support" from real Toast representatives, the complaint includes accounts from more than a dozen customers who said they struggled to reach anyone at Toast, even after weeks or months of trying.

Christopher Mufarrige, Director of the FTC's Bureau of Consumer Protection, said the practices have "drained the hard-earned profits of businesses just trying to serve their customers." He added: "These practices are illegal, and the FTC will continue to take aggressive action to ensure a fair, transparent and competitive marketplace."

What is Toast's defense?

Toast strongly disagrees with the allegations. The company said it had worked with the FTC since mid-2025 to resolve the claims outside of court. "The FTC disregarded the information we provided showing the extent to which our restaurant customers negotiate their contracts," Toast said in a statement. "We are prepared to defend our business and fight this unprecedented action through litigation."

Toast also raised a legal objection. The FTC is applying the Restore Online Shoppers' Confidence Act, which Toast argues does not cover contracts between businesses. The company offered no signal of settlement. "Nothing about today's news changes our customer service, pricing, or support," it said.

Notably absent from the complaint's public framing is any allegation of intentional fraud. The case rests on disclosure, enrollment, and cancellation practices, not on claims that Toast's technology failed. The company also remains committed, it said, to helping restaurants operate better and increase sales.

The litigation's outcome will test how federal consumer protection law applies to business-to-business software contracts in the restaurant sector. For now, Toast's pricing and support model stays unchanged, and the dispute moves to discovery.