FTC, Eight States Sue Toast Inc. Over Hidden Fees and Deceptive Practices
Federal and state regulators allege the restaurant software firm misled customers on pricing and falsely advertised round-the-clock support.
The Federal Trade Commission joined forces with California prosecutors and attorneys general from eight states Tuesday to file a lawsuit against Toast Inc., the restaurant software and financial technology company, over allegations of deceptive pricing and unauthorized charges.
Regulators allege Toast concealed fees from customers and enrolled them in subscriptions or billed them for services without proper authorization. The complaint also challenges the company's marketing of "24/7/365" customer support as misleading, suggesting the reality fell short of that promise.
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The coalition bringing the action includes the Los Angeles County Counsel, the San Francisco City Attorney, and the attorneys general of Colorado, Florida, Illinois, Iowa, Nebraska, Oklahoma, and Utah — a broad multistate effort signaling coordinated scrutiny of fintech companies that serve small business operators in the restaurant sector.
Toast, which provides point-of-sale systems, payroll tools, and payment processing to hundreds of thousands of restaurants, has grown into a major player in hospitality technology. Allegations that it obscured the true cost of its services carry particular weight for an industry already operating on thin margins, where unexpected software fees can meaningfully affect a business's bottom line.
The lawsuit adds Toast to a growing list of subscription-based technology firms facing regulatory pressure over so-called "junk fees" and opaque cancellation practices, a focus area the FTC has prioritized in recent enforcement cycles. Continue reading at Press Release Feed.
