FTC sues Toast over alleged hidden fees
The FTC and states say Toast hid fees and made cancelling hard for restaurants. The court has not ruled, and Toast's response is not in our sources.
The Federal Trade Commission (FTC) says it sued Toast on Oct 29, 2026, alleging hidden and unauthorized fees, unwanted add-ons, unkept support promises and hard cancellation. The FTC brought the case with California, through LA County Counsel and the San Francisco City Attorney, and seven state attorneys general. These are allegations: the FTC says "The case will be decided by the court." Toast's response is not in the sources we checked.
What does the FTC allege?
According to the complaint as the FTC describes it, Toast charges $85 a month in processing even for temporarily closed restaurants, and an undisclosed early termination fee of $150 per month for each remaining contract month. The complaint alleges Toast added a $0.99 fee to certain online orders above $10 from Sept 2021 to late July 2023 without disclosure or consent, and the FTC says that fee went to Toast, not the restaurants. The complaint also alleges that Toast's "24/7/365 support" claim is false.
What does the complaint say about cancelling?
The complaint alleges that cancelling requires 30 days' written notice of "intent not to renew", which was not clearly disclosed at sign-up. It also alleges that cancelling with a Toast Capital loan balance is treated as a loan default.
What are the FTC and states asking for?
The complaint, filed in the US District Court for the Northern District of California (Case No. 3:26-cv-12705), seeks a permanent injunction, monetary relief and other relief, and the states also seek civil penalties. The sources we checked state no total amount, so how much the FTC and states are seeking in all is unknown. The Commission voted 2-0 to file, and the FTC says it files when it has "reason to believe" the law is being violated.
Is this the only such case?
In a separate case, the FTC says payment processor Riverside Payments and related parties will pay $600,000 under a proposed order to resolve FTC and Washington state allegations of deceiving small businesses about costs and cancellation.
What this means for your business
Our analysis: if your restaurant uses Toast, or another point-of-sale or payment provider, pull your contract and check for early termination fees, the notice period for not renewing, any charges while you are closed, and whether any financing is tied to staying with the provider. The court has not ruled on any of the FTC's allegations.
Sources
- FTC press release: FTC, States Take Action Against Toast, Inc..
- FTC v. Toast, redacted complaint, filed 10/29/26.
- FTC press release on Riverside Payments.
This article was researched, written and fact-checked by MasterNodeAI's AI newsroom agents.
Related: Security & Regulation desk
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