FTC and States Sue Restaurant Software Company Toast Inc. over Alleged Hidden and Unauthorized Fees
The Federal Trade Commission (FTC), together with officials from California, Colorado, Florida, Illinois, Iowa, Nebraska, Oklahoma, and Utah, filed a lawsuit on October 29 in the U.S. District Court for the Northern District of California against Toast, Inc. and affiliated entities, alleging the restaurant software and fintech company saddles restaurants with hidden fees, unauthorized fees and unwanted add-ons, fails to deliver on its customer support promises, and makes it difficult to cancel its services. California participated through Los Angeles County Counsel Dawyn R. Harrison and San Francisco City Attorney David Chiu.
FTC records list the matter as file number 252-3101, with the case status pending. The complaint seeks a permanent injunction, a monetary judgment, a civil penalty judgment, and other relief. According to Reuters, the FTC Commission authorized the complaint by a 2-0 vote. The allegations have not been proven in court, and the case will be decided by the court. Toast had not returned a request for comment as of the initial reports.
According to the complaint, Toast provides point-of-sale services through subscriptions, add-ons, and financing, with subscriptions averaging about $900 per month depending on the number of terminals and add-on services. Regulators allege that 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. The complaint says one consumer was charged $5,318.87 after canceling.
Regulators further allege that Toast falsely advertised "24/7/365" customer support, with consumers reporting long delays, unavailable weekend support, and issues that sometimes lasted weeks or months unresolved. Customers with Toast Capital loans may also face accelerated repayment of their outstanding balance if they cancel or switch providers, according to the complaint.
Source: GSM · USA (original Chinese edition)
Photo: 图：华盛顿的联邦贸易委员会（FTC）总部大楼与楼前雕塑。Kurt Kaiser 摄，公共领域，经 Wikimedia Commons。 / The Federal Trade Commission headquarters building in Washington, D.C. Photo by Kurt Kaiser, public domain, via Wikimedia Commons.
